topic Re: Retirement account early withdrawal for qualified birth - a question in Get your taxes done using TurboTax

Retirement account early withdrawal for qualified birth - a question

bhuether — Mon, 15 Mar 2021 14:09:58 GMT

Hi,

My son was born in 2012 in Moscow, and over the course of several years I had been trying to get the mother to cooperate with me and update the birth certificate establishing my paternity. In September of last year I finally received an updated birth certificate after turning to a Moscow court. I know per the rules, a qualified birth early IRA withdrawal has to be done within a year. But curious if I have grounds to request an exception from the IRA, and be allowed to use this exception, since only recently was I even able to establish my paternity legally.

Thoughts?

Re: Retirement account early withdrawal for qualified birth - a question

ColeenD3 — Mon, 15 Mar 2021 15:59:06 GMT

No. The IRS regulations are in black and white and do not allow for extenuating circumstances.

A QBOAD is defined under the Internal Revenue Code [IRC] as any distribution of up to $5,000 from an applicable eligible retirement plan to an individual if made during the one-year period beginning on the date on which a child of the individual is born or the legal adoption of an eligible adoptee is finalized,” the attorneys say. “Each parent is entitled to receive a $5,000 distribution (not indexed for inflation) for the same child; if there are multiple births, each parent is entitled to receive a $5,000 distribution for each child.”

Re: Retirement account early withdrawal for qualified birth - a question

bhuether — Mon, 15 Mar 2021 16:14:46 GMT

Thanks for the note. I guess I was hoping maybe the IRS can view circumstances, similar to how the Dept of Veterans Affairs considers circumstances. The VA has similar policy to not add a biological child to VA pay benefits if the birth was not reported within a year. They waived that requirement when they saw my supporting documentation a couple months ago (court records, etc), despite the black and white writing of the policy. Most government agencies have various exception to policy procedures (sometimes only internally known), so I started to get curious what sort of exceptions to policy the IRS might consider, and how to possibly convince the IRS to consider an exception. Sometimes it is all about the narrative, the language, the mood of the civil servants and their co-workers. Maybe the IRS is the exception, in that they never consider exceptions...which in my experience with the govt, would be exceptional 🙂 In the meantime, I am drafting up a request for an exception 🙂

Re: Retirement account early withdrawal for qualified birth - a question

ColeenD3 — Mon, 15 Mar 2021 16:42:36 GMT

You can always try. As I said, the IRS doesn't usually allow exceptions.