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Retirement tax questions
If you were paying the 10% penalty, then you can answer Yes to that question. If you were taking the Separation from Service exception, and not paying the early withdrawal penalty, you can answer No.
Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax. Generally, the amounts an individual withdraws from an IRA or retirement plan before reaching age 59½ are called ”early” or ”premature” distributions. Individuals must pay an additional 10% early withdrawal tax unless an exception applies. Separation from service after age 55 is one of the exceptions.
The early withdrawal 10% penalty does not apply distributions made from qualified plans to an employee after separation from service after attainment of age 55.
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