Solved: How to get back extra early 10% withdrawal from IRA due to permanent disability
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New Member

How to get back extra early 10% withdrawal from IRA due to permanent disability

I paid Federal and State taxes con a compete distribution of my IRA due to permanent disability. How do I get the extra 10 % penalty back or where do I put this on my taxes in turbo tax?
Thank you,
Ron S.
1 Best answer

Accepted Solutions
Level 15

How to get back extra early 10% withdrawal from IRA due to permanent disability

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

There will be a screen that says "Lets see if we can reduce your penalty? "  Permanent disability is on the list if you qualify.

"Disabled.   If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.

  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 physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration."



**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

View solution in original post

5 Replies
Level 15

How to get back extra early 10% withdrawal from IRA due to permanent disability

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

There will be a screen that says "Lets see if we can reduce your penalty? "  Permanent disability is on the list if you qualify.

"Disabled.   If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.

  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 physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration."



**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

View solution in original post

New Member

How to get back extra early 10% withdrawal from IRA due to permanent disability

What amount would you enter, 10% of the amount withdrawn?
Level 15

How to get back extra early 10% withdrawal from IRA due to permanent disability

You enter the amount of the distribution.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Returning Member

How to get back extra early 10% withdrawal from IRA due to permanent disability

I understand your post but how do you actually provide information from a doctor? Do you have to have your doctor right a letter and then attach it to your tax return? Is there a format for the letter? I assume the doctor is going to ask how they need to write the letter.

Level 15

How to get back extra early 10% withdrawal from IRA due to permanent disability


@Bbinder2002 wrote:

I understand your post but how do you actually provide information from a doctor? Do you have to have your doctor right a letter and then attach it to your tax return? Is there a format for the letter? I assume the doctor is going to ask how they need to write the letter.


See IRS Pub 524, page 8 for a sample physicians statement that you should have for your records but only submit to the IRS if they ask for it.

 

https://www.irs.gov/pub/irs-pdf/p524.pdfhttps://www.irs.gov/pub/irs-pdf/p524.pdf

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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