Question

Early Withdrawal 55 exemption

Forum|Forum|1 year ago
February 6, 2025
1 reply
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I use turbo tax software to do my own tax. What software version would I need to claim the Early Withdrawal 55 exemption and what do I need to file out to get the exemption?

M

MindyB

You can use any of the software versions to report this, except the free edition, because you will need to file Form 5329. You can always start in any version of the software, and if needed, you will be prompted to upgrade.

It sounds like you qualify for the "Rule of 55", which is an exception to the early retirement withdrawal penalty, if you are 55 or older, and are withdrawing from your current retirement plan. If that is correct, you can claim it by entering the 1009-R information, then continuing through the interview until you get to the screen "These Situations May Lower Your Tax Bill." Here, enter the amount you took out that met the Rule of 55.

Here is some more information from the IRS: Retirement topics - Exceptions to tax on early distributions