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New Member
posted Mar 7, 2025 10:01:33 AM

I took an early distribution on my pension due to disability. The program states the early withdrawal is "tax free" but it is charging me taxes on this amount anyway

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2 Replies
Level 15
Mar 7, 2025 10:20:42 AM

Where are you seeing the "tax free" statement when entering the Form 1099-R?

 

If you are under the retirement age for where you worked and the code in box 7 is a 3 then the distribution is entered on the federal tax return on Line 1h of the form 1040 as earned income.

Expert Alumni
Mar 7, 2025 10:21:00 AM

Your distribution is taxable, however, the early withdrawal penalty will be waived. 

For more information, check: irs.gov