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I received a 1099-R from a prior year over contribution into a pension account. Am I required to pay the 10% early withdraw fee or is there an exception reason?

This occurred years ago and the state controller was holding the funds - we finally contacted them to distribute them and I am not 100% certain how to handle on my taxes and if I need to pay the early withdraw penalty?
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DanaB27
Expert Alumni

I received a 1099-R from a prior year over contribution into a pension account. Am I required to pay the 10% early withdraw fee or is there an exception reason?

It seems this would be a regular distribution and therefore subject to the 10% early withdrawal penalty if you are under 59 1/2. Please see IRS Retirement topics: Exceptions to tax on early distributions for additional information.

 

 If you do not take out the excess amount by April 15th of the following year, then you are taxed twice on the excess deferral left in the plan.  This happens once when you contribute it and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.

 

 

Please follow these steps to enter Form 1099-R:

 

  1. Click on "Search" on the top right and type “1099-R”  
  2. Click on “Jump to 1099-R”
  3. Click "Continue" and enter the information from your 1099-R

 

Please see Pub 525 for additional information.

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