For distributions to be "qualified distributions" that are entirely tax-free, they must meet two requirements. First, the distribution must be made after the 5-tax-year period beginning with the first tax year a contribution was made to the Roth IRA. Second, the distribution must be made after one of the four following events has occurred:
1) The participant has reached age 59½.
2) The distribution is paid to a beneficiary due to the participant's death.
3) The participant has become disabled.
4) The withdrawal is made to pay qualified first-time homebuyer expenses or substantially equal annuity payments.