Deductions & credits

Did you rollover the pension to an IRA, and then withdraw from the IRA?  That is taxable plus a penalty, if you are under 59-1/2.  Although you can withdraw from at least some workplace retirement plans without penalty if you separate from service after turning 55 or older (age 50 for public safety officers) that only applies to the original workplace plan.  Once the money is rolled into an IRA, it becomes IRA money and the age limit is 59-1/2.  That's what my colleagues assumed you were asking.

 

However, it sounded to me like you were asking if there is a penalty on the actual rollover from the pension to the IRA.  The actual rollover should not be subject to income tax or a penalty as long as you completed the rollover properly.  If you only did a partial rollover, you will pay income tax on the part that was not properly rolled over, but there is no additional penalty after age 50.