Re: I am confused about my 1099 R. If I quit working for the employer, can i avoid the penalty? The reason I cashed out was because i quit the job.

I am confused about my 1099 R. If I quit working for the employer, can i avoid the penalty? The reason I cashed out was because i quit the job.

posted

If you were not age 59 1/2 or older in the year of the withdrawal, then you will owe a 10% early withdrawal penalty which is assessed on your tax return after you enter the 1099-R.

Quitting a job is not an exception to the early-distribution penalty. You had the opportunity to roll this distribution over to another qualified retirement account to continue to defer this income and avoid the early-distribution penalty.