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posted Feb 8, 2024 11:38:27 AM

Is there a penalty against form 1099R IRA Distribution required payment due to Involuntary Layoff?

According to Turbo Tax, I have to pay a $70 penalty for early withdrawal. I did not voluntarily withdraw the funds, but was a required Distribution due to layoff...

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1 Replies
Level 15
Feb 8, 2024 11:42:50 AM

Sorry, being laid off from work is not an exception to the 10% early withdrawal penalty. 

You could have rolled the distribution over to another tax deferred account, such as an IRA, within 60 days so none of the distribution would be taxed nor have the early withdrawal penalty.