Exemptions Early Distribution IRA

[Cozmo20077]

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 

[MaryK4]

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:

• Dec. 29, 2022
• The first day of the incident period with respect to the qualified disaster, or
• The date of the disaster declaration with respect to the qualified disaster.

See Access retirement funds in a disaster | Internal Revenue Service.