There is an exception to the early distribution penalty for
401k distributions for separation from service during or after the year when the
plan participant reaches age 55.
So, if you turned 55 or older during 2017, your deemed
distribution will not be subject to the penalty. If that is not the case, then your
distribution code on the Form 1099-R may indicate that there is another
exception that applies.
For more information, see Retirement
Topics – Exceptions to Tax on Early Distributions
