Under age 59 1/2, Form 1099-r ESOP plan was terminated, reaching benefits leaving employee. Identify this plan & reason why I'm exempt to pay additional tax.

The company was sold my ESOP had an open window of choice to distribute or roll over to an IRA. As I'm completing my 1099-r it's asking me to identify the plan which I'm not sure if this is a qualified plan. What reason is acceptable for no early withdraw penalty do no additional tax would apply.

1402

Level 15

Jun 1, 2019 3:54:52 PM

The ESOP is a qualified plan.

The following IRS web page lists the possible exceptions to the early-distribution penalty (the "additional tax"):

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...

If you rolled the entire amount over to a traditional account in another retirement plan, there is no tax or penalty.

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Under age 59 1/2, Form 1099-r ESOP plan was terminated, reaching benefits leaving employee. Identify this plan & reason why I'm exempt to pay additional tax.