Need to figure out if I qualify to be exempt from the additional 10% penalty tax since it created quite a difference in the tax return amount calculated it’s a 401(k) from my prior Employer, so no contributions have been made for 3 1/2 years and I took the distribution because of financial hardship that I’m still currently in. I took the total distribution in August 2024 and then we did have a hurricane two months later in October 2024 and I did have them keep the 10% normal tax and that was 439.90 and the distribution code on the 1099 – R is one also box 2b taxable amount not determined and total distribution are both checked. Do I qualify for an exemption since I still could use every penny I can get back? Form 1099-R
First of all do not be confused- your distribution was from a 401(k) NOT an IRA. It makes a bug difference.
There is a one distribution per calendar year for personal or family emergency expenses, up to the lesser of $1,000 or vested account balance over $1,000 (made after 12/31/2023)
For the Disaster recovery distribution: A qualified disaster recovery distribution is a distribution to a qualified individual that is made from an eligible retirement plan on or after the first day of the incident period of a qualified disaster and before the date that is 180 days after the latest of the following three dates:
See Access retirement funds in a disaster | Internal Revenue Service.
Thank you for providing that information but I do want to make sure I have this right so after I left that company they changed who handles their 401K and the new company information that I got the distribution from is below and next to the Distribution Code 1 on my 1099-R form is IRA/SEP/Simple is checked so was it still a 401K or had it changed into an IRA? Then how do I complete my taxes to make sure I do get the most back I can? I don't want to complete them incorrectly and then have more headaches later on and my extension request has been approved.
TIN: 75-3182674
MATRIX TRUST COMPANY
ONEAMERICA
P.O. BOX 52129
PHOENIX, AZ [removed]
Thank you for helping me with this.