@peterstribe
1) The prior answers are from last year's Q&As...but still apply to this year (though 1 year added on to the year dates). (see added comment about Desktop vs Online software at the end)
2) As long as it is a Military pension from DFAS.
3) As long as box 7 contains a "7" for the distribution code.
4) then you can go ahead, and answer No ...because the 59.5 year rule doesn't apply to military pensions from DFAS......as long as you mark that 1099-R as noted in step 5 below>
5) you also need to make sure you tag that particular military DFAS 1099-R as being "From a Non-qualified Plan" on one of the interview pages after the main form entries, that asks about this being either a Qualified, or Non-qualified .
6) IF properly marked as noted in #5, there will be no 10% penalty applied, but it is still subject to normal Federal taxes (states vary).
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Later Notes. Tested the "online software.....For "Online" software users, for a Military DFAS pension 1099-R, the user must answer "No, this was not an early withdrawal" in the interview follow-up pages, as long as box 7 had a code "7 " in it. If you answer Yes (even if true), the Online software will improperly apply a 10% early withdrawal penalty.
(Desktop users could answer either Yes or No as long as step 5 above is marked properly)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
