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Category: Other Tax Forms

Form 5329 - Exceptions to Early Withdrawal Penalty

If your 1099-R distribution was for one of the reasons below, it is generally exempt from additional penalties for early withdrawal:

 

01

Qualified retirement plan distributions (does not apply to IRAs). If you separated from service in or after the year you reach age 55 (age 50 for qualified public safety employees).

02

Distributions made as a part of a series of substantially equal periodic payments (made at least annually) for your life or the joint lives of you and your designated beneficiary (if from an employer plan, payments must begin after separation from service).

03

Distributions due to total and permanent disability.

04

Distributions due to death (does not apply to modified endowment contracts)

05

Qualified retirement plan distributions up to (1) the amount you paid for unreimbursed medical expenses during the year minus (2) 10% (7.5% if you or your spouse are age 65 or older) of your adjusted gross income for the year.

06

Qualified retirement plan distributions made to an alternate payee under a qualified domestic relations order (does not apply to IRAs).

07

IRA distributions made to unemployed individuals for health insurance premiums.

08

IRA distributions made for higher education expenses.

09

IRA distributions made for the purchase of a first home (up to $10,000)

10

Distributions due to an IRS levy on the qualified retirement plan.

11

Qualified distributions to reservists while serving on active duty for at least 180 days.

12

Other ( enter this code if more than one exception applies ).



Other: Click here to reference IRS Publication 575 to view other exceptions.

 

How to Report in TaxSlayer: If any of the exceptions apply to an early withdrawal (Form 1099-R) that you are reporting, select option "1 - Transfer Taxable Amount to 1099-R (Box 2) to Form 5329, Part I, Line 1" from the drop-down menu on the 1099-R entry screen. Then select Federal Section > Other Taxes > Tax on Early Distribution. Enter the amount that is exempt and select the reason from the drop-down menu for the field "Enter the reason for exemption".