Nonperiodic Distribution

AAA

DEFINITION of 'Nonperiodic Distribution'

A type of employee retirement-plan distribution that is not considered a periodic distribution. Periodic distributions would include monthly payments, while nonperiodic payments would be one-time lump-sum payments.

Nonperiodic distributions that are paid directly to the employee will be subject to a 10% withholding tax unless the beneficiary elects to have no taxes withheld.

INVESTOPEDIA EXPLAINS 'Nonperiodic Distribution'

Nonperiodic distributions do not include IRA transfers and/or rollovers, systematic withdrawals or required minimum distributions. Only taxable distributions that are taken in cash are subject to the withholding tax.

The withholding rule is intended to discourage employees from raiding their retirement assets before they are retired.

RELATED TERMS
  1. Lump-Sum Payment

    A one-time payment for the total or partial value of an asset. ...
  2. Direct Rollover

    A distribution of eligible rollover assets from a qualified plan, ...
  3. Distribution

    1. When trading volume is higher than that of the previous day ...
  4. Systematic Withdrawal Schedule

    A method of withdrawing funds from an annuity account by which ...
  5. Withholding Tax

    1. Income tax withheld from employees' wages and paid directly ...
  6. Lump-Sum Distribution

    A one-time payment for the entire amount due, rather than breaking ...
Related Articles
  1. 3 Retirement Account Rules To Know
    Taxes

    3 Retirement Account Rules To Know

  2. Avoiding Too Much Tax On Your Distributions
    Retirement

    Avoiding Too Much Tax On Your Distributions

  3. 9 Penalty-Free IRA Withdrawals
    Taxes

    9 Penalty-Free IRA Withdrawals

  4. What are the rules and reporting requirements ...
    Retirement

    What are the rules and reporting requirements ...

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center