A non-taxable Early Removal Fee will apply if, during the three-year holding period after July 31, 2026, you withdraw or transfer funds in an amount that causes your remaining net Qualified Deposits in the eligible account to fall below $50,000.
The Early Removal Fee is equal to 1.2% of the amount by which your withdrawal or transfer reduces your remaining net Qualified Deposits below $50,000, taking into account any later deposits you make into the eligible account or market gains earned in the account after the offer period.
The Maximum aggregate Early Removal Fee is $600.
- For example, if your net Qualified Deposits total $60,000 and you withdraw $30,000 during the holding period, your remaining net Qualified Deposits would be $30,000. In that case, the withdrawal would be charged a $240 Early Removal Fee, which is 1.2% of the $20,000 withdrawn below the $50,000 threshold.
- If you had made an additional $10,000 deposit during the holding period before that withdrawal, the same $30,000 withdrawal would instead be charged a $120 Early Removal Fee, which is 1.2% of $10,000.
If you make multiple withdrawals or transfers during the holding period, each withdrawal may be subject to an Early Removal Fee, subject to the rules above.