A key factor in determining tax treatment of distributions from qualified retirement plans is whether the employee made pre-tax or after-tax contributions.

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This statement is true. The tax treatment of distributions from qualified retirement plans, such as 401(k) plans, depends on whether the employee made pre-tax or after-tax contributions to the plan. Pre-tax contributions are deducted from the employee's income before taxes are calculated, so they are taxed as ordinary income when distributed. After-tax contributions are made with taxed income, so they are not taxed again when distributed. Other factors, such as the age of the account owner and the length of time the funds have been invested, can also affect the tax treatment of distributions.

A Key Factor in Determining Tax Treatment of Distributions from Qualified