topic Early IRA withdraw Penalty Tax in Retirement tax questions

Early IRA withdraw Penalty Tax

queengate8 — Tue, 01 Mar 2022 19:21:59 GMT

We receive a monthly payment from an IRA and I am under 59 do I still have to pay the 10% penalty? This IRA is from my husbands employer who paid him for early retirement.

Re: Early IRA withdraw Penalty Tax

VolvoGirl — Tue, 01 Mar 2022 19:30:43 GMT

"WE" do not receive payments. An IRA means individual retirement account. It is only in your husband's name and goes by his age. He rolled the employer payment into a IRA? Did he get a 1099R when he rolled it over? @dmertz any thoughts?

Re: Early IRA withdraw Penalty Tax

MinhT1 — Tue, 01 Mar 2022 19:40:26 GMT

The IRS says in this document:

If distributions are made as part of a series of substantially equal periodic payments over your life expectancy or the life expectancies of you and your designated beneficiary, the §72(t) tax does not apply. (The §72(t) tax is the 10% penalty).

Please read this document carefully as there are conditions and guidance from the IRS to avoid the penalty.