topic Re: Exemptions Early Distribution IRA in Retirement tax questions

Exemptions Early Distribution IRA

Cozmo20077 — Tue, 15 Apr 2025 20:14:47 GMT

Need to figure out if I qualify to be exempt from the additional 10% penalty tax since it created quite a difference in the tax return amount calculated it’s a 401(k) from my prior Employer, so no contributions have been made for 3 1/2 years and I took the distribution because of financial hardship that I’m still currently in. I took the total distribution in August 2024 and then we did have a hurricane two months later in October 2024 and I did have them keep the 10% normal tax and that was 439.90 and the distribution code on the 1099 – R is one also box 2b taxable amount not determined and total distribution are both checked. Do I qualify for an exemption since I still could use every penny I can get back?

Re: Exemptions Early Distribution IRA

MaryK4 — Wed, 16 Apr 2025 00:44:24 GMT

First of all do not be confused- your distribution was from a 401(k) NOT an IRA. It makes a bug difference.

There is a one distribution per calendar year for personal or family emergency expenses, up to the lesser of $1,000 or vested account balance over $1,000 (made after 12/31/2023)

For the Disaster recovery distribution: A qualified disaster recovery distribution is a distribution to a qualified individual that is made from an eligible retirement plan on or after the first day of the incident period of a qualified disaster and before the date that is 180 days after the latest of the following three dates:

Dec. 29, 2022
The first day of the incident period with respect to the qualified disaster, or
The date of the disaster declaration with respect to the qualified disaster.

See Access retirement funds in a disaster | Internal Revenue Service.

Re: Exemptions Early Distribution IRA

Cozmo20077 — Mon, 21 Apr 2025 13:15:45 GMT

Thank you for providing that information but I do want to make sure I have this right so after I left that company they changed who handles their 401K and the new company information that I got the distribution from is below and next to the Distribution Code 1 on my 1099-R form is IRA/SEP/Simple is checked so was it still a 401K or had it changed into an IRA? Then how do I complete my taxes to make sure I do get the most back I can? I don't want to complete them incorrectly and then have more headaches later on and my extension request has been approved.

TIN: 75-3182674

MATRIX TRUST COMPANY

ONEAMERICA

P.O. BOX 52129

PHOENIX, AZ [removed]

Thank you for helping me with this.

Re: Exemptions Early Distribution IRA

CatinaT1 — Tue, 29 Apr 2025 17:51:02 GMT

I would confirm with the issuer of the 1099-R. If it was a 401(k), that IRA/SEP/Simple box should not be checked.