Exceptions to Early Distributions from A Retirement Plan

The Internal Revenue Service website, irs.gov, has recently posted an informative summary table of the kinds of distributions that are currently subject to an additional 10% excise tax due to early withdrawals of retirement plan funds.  For convenience, the table is reposted here. Withdrawal of funds prior to reaching an age of 59 1/2 are categorized as premature and subject to a penalty unless an exception is noted at the time of distribution.  The characterization of this distribution is coded in Box 7 of the IRS Form 1099R sent to both the IRS and the individual to whom the distribution is paid.  Note in this table below that 457(b) distributions are an exception.


Note that this particular page was last reviewed June 17, 2013 above.  There are other timely topics pertaining to retirement plan operation, internal controls, and information particularly relevant to employees covered in this particular issue. Consider the HTML version of Retirement News For Employers August 20, 2013 Edition here for other important and current references related to retirement plans.


Consult a qualified tax preparer.