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May 7, 2020
Question

I was offered a one time only and in a certain timeline to withdrawal. I had been on workman comp. for months my car blew and needed a vehicle for my dr. App.

  • May 7, 2020
  • 1 reply
  • 0 views
So do I pay an early retirement fee?

1 reply

Hal_Al
Employee
May 7, 2020

Your question is not clear.  But it appears that you asking if you have an exception to the early withdrawal penalty, for taking money out of a retirement plan.

 

Q. So do I pay an early withdrawal penalty?

A. Yes, probably. There is no general hardship exception. 

 There are very few exceptions to the TAX on Retirement distributions. Allowable exceptions to the 10% early (before age 59-1/2) withdrawal penalty  are:

  1. Rollovers to another IRA (no tax due)
  2. Disability
  3. Medical costs exceeding 7-1/2% of AGI
  4. Separation from service at age 55 or older (pensions & 401K but not IRAs)
  5. Substantially equal periodic payments (SEPP)
  6. Military reservist called to active duty
  7. Public safety employees separated after age 50 (pensions & 401K but not IRAs)
  8. IRS levy
  9. Education expenses (Only IRAs; not available for withdrawals from 401k plans)
  10. Court ordered spousal payments (pensions & 401K but not IRAs)
  11. First time home buyer (Only IRAs; not available for withdrawals from 401k plans)
  12. Made to a beneficiary or estate on account of the IRA owner's death
  13. Unemployed Medical Insurance
  14. Age 59-1/2
  15. See the instructions for form 5329, for some other obscure exceptions http://www.irs.gov/pub/irs-pdf/i5329.pdf

 

Reference https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans