Common use of Non-Qualified Distributions Clause in Contracts

Non-Qualified Distributions. If a Designated Beneficiary withdraws an amount from a Xxxxxxxxx ESA and does not have any Qualified Education Expenses during the year, the amount of the withdrawal is taxable to the Designated Beneficiary. The taxable portion of the distribution is the portion that represents earnings in the Xxxxxxxxx ESA. The earnings portion of a Non-qualified Distribution is also subject to an additional 10% tax, unless an exception applies.

Non-Qualified Distributions. If a Designated Beneficiary withdraws an amount from a Xxxxxxxxx ESA and does not have any Qualified Education Expenses during the year, the amount of the withdrawal is taxable to the Designated Beneficiary. The taxable portion of the distribution is the portion that represents earnings in the Xxxxxxxxx ESA. The earnings portion of a Non-Non- qualified Distribution is also subject to an additional 10% tax, unless an exception applies.