QKA EXAM 1 2025/2026 QUESTIONS WITH
CORRECT ANSWERS100% ACCURATELY RATED
REAL EXAM A+ GRADED –BARTON COMMUNITY
COLLEGE
Financial Hardship Distributions
· Medical care
· Principal residence purchase or damage repair
· Tuition payments
· Eviction prevention
· Burial/funeral expenses
· Federal disaster
· Adoption/birth - $5000 per child - no 10% tax - 1 year period to apply for it
Financial Hardship Requirements
Requirements include:
· Can't exceed hardship
· Available other distributions have been taken
· Other means can not satisfy the financial need
,Financial Hardship Sources
Money for certain situations:
· Elective deferrals
· Matching contributions
· Nonelective contributions
· QNECs and QMACs
· Safe harbor contributions
· After-tax contributions
Pre-Tax Hardship Withdrawal
Withdrawal that is:
· Taxed as ordinary income
· Plan doc defines which sources
· Subject to state and local income taxes
Required Minimum Distribution (RMD)
minimum amount that must be withdrawn from a retirement plan each year
must be taken no later than the April 1st of the year after age 72
taxation notice notifies participants
, RMD Exceptions
no distribution if:
· Still employed and not a 5% owner
· Dies - gives lump sum or annuity to beneficiaries
RMD Penalty
· Required distributions not taken = 50% tax on money in addition to any income taxes
due
Domestic Relations Order
· Plan determines if qualified or not
· Alternate payee = has a right to some or all benefits
· Must contain:
o Name + mailing address of participant and alternate payee
o Name of plan
o Amount or % of benefits that alternate payee has rights to
o # of payments or period that the order covers
Qualified Roth IRA distribution
- not taxed at distribution
· 5-year rule - it's been 5 years since the first contribution
CORRECT ANSWERS100% ACCURATELY RATED
REAL EXAM A+ GRADED –BARTON COMMUNITY
COLLEGE
Financial Hardship Distributions
· Medical care
· Principal residence purchase or damage repair
· Tuition payments
· Eviction prevention
· Burial/funeral expenses
· Federal disaster
· Adoption/birth - $5000 per child - no 10% tax - 1 year period to apply for it
Financial Hardship Requirements
Requirements include:
· Can't exceed hardship
· Available other distributions have been taken
· Other means can not satisfy the financial need
,Financial Hardship Sources
Money for certain situations:
· Elective deferrals
· Matching contributions
· Nonelective contributions
· QNECs and QMACs
· Safe harbor contributions
· After-tax contributions
Pre-Tax Hardship Withdrawal
Withdrawal that is:
· Taxed as ordinary income
· Plan doc defines which sources
· Subject to state and local income taxes
Required Minimum Distribution (RMD)
minimum amount that must be withdrawn from a retirement plan each year
must be taken no later than the April 1st of the year after age 72
taxation notice notifies participants
, RMD Exceptions
no distribution if:
· Still employed and not a 5% owner
· Dies - gives lump sum or annuity to beneficiaries
RMD Penalty
· Required distributions not taken = 50% tax on money in addition to any income taxes
due
Domestic Relations Order
· Plan determines if qualified or not
· Alternate payee = has a right to some or all benefits
· Must contain:
o Name + mailing address of participant and alternate payee
o Name of plan
o Amount or % of benefits that alternate payee has rights to
o # of payments or period that the order covers
Qualified Roth IRA distribution
- not taxed at distribution
· 5-year rule - it's been 5 years since the first contribution
