1) It must happen at least five years after the Roth IRA owner formed and funded his first Roth IRA
A Roth IRA means Individual Retirement Arrangement. It is a retirement plan by US law that is generally not taxed, when certain conditions are met. The tax law of the US allows a tax reduction on some amount of saving for retirement. The Roth IRA's basic difference from most other tax advantaged retirement plans is that, instead of granting a tax break for money parked into the plan, the tax benefit is granted on the money withdrawn from the plan during retirement.
It can be an individual retirement account having investments in securities, usually stocks and bonds, and often through mutual funds (although alternative investments including derivatives, notes, certificates of deposit, and real estate are also possible). A Roth IRA can also be an individual retirement annuity, which is an annuity contract or an endowment contract dealt from a life insurance company.
2) At least one of the remaining requirements must be met:
i) The Roth IRA holder must be of at least age 59.5 when the distribution happens.
ii) Distributed assets limited to $10,000 are used for the purchase or rebuilding of a first
home for the Roth IRA holder or a nominated family member.
iii) The distribution happens after the Roth IRA holder becomes disabled.
iv) The assets are distributed to the nominated beneficiary of the Roth IRA holder after his death.
Non-Qualified Distribution is:
1) A distribution by the Roth IRA that happens before the Roth IRA owner fulfils certain requirements
2) A distribution from an education savings account that surpasses the amount used for qualified education expenses.
Generally, when a distribution is non-qualified, the amount attributable to earnings will be taxed according to income tax laws and an early-distribution penalty of 10%.