topic Cannot find "Emergency Personal Expense" 1099-R exception in online tool in Tax law changes

Cannot find "Emergency Personal Expense" 1099-R exception in online tool

MissingMyForm — Thu, 05 Feb 2026 00:07:10 GMT

My bank's 1099-R form used code "J" for "Early distribution from a Roth IRA, no known exception." As far as I can tell, TurboTax is not offering me the option to include a Form 5329 to state that the exception is a $1,000 emergency personal expense distribution. This exception has been permitted in tax law since 2024.

I talked to my bank and they said this needs to be clarified by my tax preparer, and not Form 1099-R. As far as I can tell in my research, they are correct: They were supposed to use Code J, and I am supposed to file a Form 5329 and list exception number 23 on Line 2 (See: https://www.irs.gov/instructions/i5329).

How do I get Form 5329 included before I file, so that I don't get a 10% early distribution penalty? Thank you!

Re: Cannot find "Emergency Personal Expense" 1099-R exception in online tool

KrisD15 — Thu, 05 Feb 2026 01:02:51 GMT

The ability to withdraw 1,000 emergency funds is not available for all plans, your plan administrator must approve and implement the option.

ADDITIONALLY, if you only withdrew your contributions to the Roth Account, there would be no tax regardless of the reason for the distribution.

Re: Cannot find "Emergency Personal Expense" 1099-R exception in online tool

MissingMyForm — Thu, 05 Feb 2026 01:19:07 GMT

The contribution vs earnings issue clears it up. I am still eligible for a penalty-free contribution withdrawal. Thank you!

But quick note that the plan administrator does not matter here. Per IRS notice 2024-55: "If an applicable eligible retirement plan does not permit emergency personal expense distributions, the individual is permitted to treat an otherwise permissible distribution as an emergency personal expense distribution. See Q&A A-15 of this notice." -https://www.irs.gov/pub/irs-drop/n-24-55.pdf

Re: Cannot find "Emergency Personal Expense" 1099-R exception in online tool

KrisD15 — Thu, 05 Feb 2026 01:57:18 GMT

Thank you for sharing that link!

The exceptions to penalties can be confusing.

If you look at that document, the portion you highlighted does have a footnote #5 which reads:

"5 For purposes of this notice, a “permissible distribution” means a distribution that meets the distribution restriction requirements in sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) and is permissible under the plan. Thus, for example, a participant in a plan that does not permit emergency
personal expense distributions may meet the requirements for a hardship distribution if the plan permits hardship distributions. In addition, a participant who terminated service with an employer with an accrued benefit under a section 401(k) plan that does not permit emergency personal expense distributions may meet the distribution restrictions for severance from employment. "

I read that to mean that a taxpayer can take a 1,000 Emergency Withdrawal if their plan has that option, and if the plan does not, the Taxpayer can still make the distribution and call it something else, such as a hardship Distribution.

I will need to do more research.

Thank you for using TurboTax.