What does Distribution Code A indicate?

Distribution Code A indicates a qualified distribution from a Roth IRA. This code is used to report that the distribution meets the requirements to be considered tax-free because it comes from a Roth IRA, which has specific rules regarding contributions and withdrawals.

One key characteristic of a qualified distribution is that it must occur at least five years after the first contribution to the Roth IRA and must also meet certain conditions, such as being made after the account owner turns 59½, due to disability, or made to a beneficiary after the owner's death.

Options that indicate other scenarios, such as early distributions or specific tax treatments for retirement plan rollovers, provide different contexts that are not relevant to the correctness of the qualified distribution code represented by A. Understanding these distinctions is essential for correctly interpreting distribution codes, especially during tax preparation or financial planning.