It's hard to tell what the issue is without knowing more about your return. However, here's some info about qualified vs non-qualified IRA distributions.
Please feel free to post any additional details or questions in the comment section and we can help you determine if yours is qualified.
An IRA is a way to save for retirement while deferring taxes on the earnings, or to plan for tax-free withdrawals in retirement. Because of these tax advantages, the IRS imposes penalties for "non-qualified" withdrawals from the individual retirement account. The usual penalty for a non-qualified withdrawal is 10 percent of the amount you withdraw. What constitutes a non-qualified withdrawal depends on whether the individual retirement account is a traditional IRA, a Roth IRA, or a self-employed IRA.
If your IRA is funded by before-tax money, meaning that you claimed a deduction from your income for your contributions, any amount you withdraw before you reach age 59 1/2 is a non-qualified withdrawal, and it's subject to penalties. If you made non-deductible traditional IRA contributions, any amount that you withdraw that is not attributable to the non-deductible contribution -- such as the earnings -- is a non-qualified withdrawal.
A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:
- Over age 59½
- Death or disability
- Qualified first-time home purchase
A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.
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