Can you 'qualify' for 10-year averaging? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Can you 'qualify' for 10-year averaging?

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Q. In a recent Mail Call, you mention the 10-year averaging break for lump-sum distributions. Does this apply to non-qualified as well as qualified retirement plans? W.D.D., via e-mail

A. No. The special income-averaging tax break for lump-sum distributions—which a participant or beneficiary may elect only once—is available only for distributions from qualified plans. In addition, you must meet certain other requirements (e.g., the plan participant must have born before 1936).  Tip: Distributions from non-qualified plans are taxable at ordinary income rates.

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