Qualified Distribution

What Does Qualified Distribution Mean?
Distributions made from a Roth IRA that are tax and penalty free. In order to be a qualified distribution, the following two requirements must be met:

1) It must occur at least five years after the Roth IRA owner established and funded his/her first Roth IRA

2) At least one of the following requirements must be met:

   a) The Roth IRA holder must be at least age 59.5 when the distribution occurs.
   b) Distributed assets limited to $10,000 are used towards the purchase or rebuilding of a first
       home for the Roth IRA holder or a qualified family member. 
   c) The distribution occurs after the Roth IRA holder becomes disabled. 
   d) The assets are distributed to the beneficiary of the Roth IRA holder after his/her death.

Investopedia explains Qualified Distribution
Distributions that do not meet the above criteria are considered non-qualified and may be subject to income tax and early distribution penalties.