Form 5329 is the form on which the Additional Taxes on Qualified Plans is calculated.
Here are the exceptions that offer relief from the penalty:
#. – Exception Description
01 Qualified retirement plan distributions
(does not apply to IRAs) you receive after
separation from service when the separation from
service occurs in or after the year
you reach age 55 (age 50 for qualified public safety
employees).
02 Distributions made as part of a series of
substantially equal periodic payments
(made at least annually) for your life (or life
expectancy) or the joint lives (or joint life
expectancies) of you and your designated beneficiary (if from
an employer plan,
payments must begin after separation from service).
03 Distributions due to total and permanent
disability.
You are considered disabled if you
can furnish proof that you cannot do any
substantial gainful activity because
of your physical or mental condition. A medical
determination that your condition can be expected
to result in death or to be of long,
continued, and indefinite duration must be made.
04 Distributions due to death (does not apply
to modified endowment contracts).
05 Qualified retirement plan distributions up
to the amount you paid for unreimbursed
medical expenses during the year minus 10% (or
7.5% if you or your spouse were
born before January 2, 1952) of your adjusted gross
income (AGI) for the year.
06 Qualified retirement plan distributions made
to an alternate payee under a qualified
domestic relations order (does not apply to
IRAs).
07 IRA distributions made to certain unemployed
individuals for health insurance premiums.
08 IRA distributions made for qualified higher
education expenses.
09 IRA distributions made for the purchase of a
first home, up to $10,000.
10 Qualified retirement plan distributions made
due to an IRS levy.
11 Qualified distributions to reservists while
serving on active duty for at least 180 days.
12 Other (see Other next). Also, enter this
code if more than one exception applies
If any of these apply to your situation the program will walk you through preparing the 5329
