Did you Take an Early Distribution from Your Retirement Plan?

 

Thông báo: Nội dung lịch sử


Đây là một tài liệu lưu trữ hoặc lịch sử và có thể không phản ánh luật pháp, chính sách hoặc thủ tục hiện hành.

Update on Aug. 4, 2015: The reference in item 10 and link to Publication 590 have been replaced by Publication 590-B.

IRS Tax Tip 2011-42, March 1, 2011 

Taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. These taxpayers may not be aware that they may face a tax impact when they file their return this year.  

Here are ten facts from the IRS about the tax implications of taking an early distribution from your retirement plan. 

  1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.
     
  2. Early distributions are usually subject to an additional 10 percent tax.
     
  3. Early distributions must also be reported to the IRS.
     
  4. Distributions you rollover to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You must complete the rollover within 60 days after the day you received the distribution.
     
  5. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.
     
  6. If you made nondeductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those nondeductible contributions is not taxed.
     
  7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
     
  8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
     
  9. There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled.
     
  10. For more information about early distributions from retirement plans, the additional 10 percent tax and all the exceptions see IRS Publication 575, Pension and Annuity Income, and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). They are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

  • Publication 575, Pension and Annuity Income
  • Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
  • Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
      

Subscribe to Tax Tips