VA 100% TOTAL &PERMANENT to avoid withdraw penalties from my employer sponsored 401k?

Forum|Forum|4 years ago
October 4, 2021
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I am currently (VA medically) rated at 100% PERMENTANT & DISABLED due to my ongoing Combat PTSD.

I am currently working full-time with FMLA absence and unexpected leave protection due to my ongoing VA medical appointments or unexpected PTSD episodes. In addition, I am under an accommodation protective status.

Would it be possible and legit to withdraw my 401k savings using my current VA 100% P&T disability to avoid penalties, but most important avoid any IRS problems in the future.

My time at work is determined on the level of my PTSD condition. I am concern that in the near future I will no longer be able to continue functioning in work environment which will lead me to rely on my VA disability compensation.

Not A Product Question

DoninGA

Employee

The 10% early distribution penalty from a 401(k) account can be waived if your are permanently and totally disabled.

Note. You are considered disabled if you can furnish proof that you can't do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or be of a long, continued, or indefinite duration.

See IRS Tax Topic 558 - https://www.irs.gov/taxtopics/tc558

See IRS Publication 575 Pension and Annuity Income page 36 - https://www.irs.gov/pub/irs-pdf/p575.pdf#page=36