Solved: I withdrew my IRA early while unemployed. My wife was employed, but a huge portion of her income was deducted for insurance. Would we qualify for a penalty exception?
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I withdrew my IRA early while unemployed. My wife was employed, but a huge portion of her income was deducted for insurance. Would we qualify for a penalty exception?

I was unemployed for about 5 months straight last year and had to make an early withdrawal of my IRA retirement in order to keep up with bills. My wife was working during the time, but over half of her paycheck went pre-tax to health insurance. Would we qualify for an exception to the early withdrawal penalty? We had medical expenses, but I don't think they were anywhere near enough to count. I'm curious if we could request an exception based on health insurance payments in our situation?

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I withdrew my IRA early while unemployed. My wife was employed, but a huge portion of her income was deducted for insurance. Would we qualify for a penalty exception?

See IRS Pub 590-B for the exceptions to the penalty fro early distributions from IRAs.  The exception for health insurance during a period of unemployment requires that you received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job, among other things:

https://www.irs.gov/publications/p590b#en_US_2017_publink1000230912

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Level 15

I withdrew my IRA early while unemployed. My wife was employed, but a huge portion of her income was deducted for insurance. Would we qualify for a penalty exception?

See IRS Pub 590-B for the exceptions to the penalty fro early distributions from IRAs.  The exception for health insurance during a period of unemployment requires that you received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job, among other things:

https://www.irs.gov/publications/p590b#en_US_2017_publink1000230912

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