Distributions from retirement accounts that occur before the account owner reaches age 59« are subject to a 10% additional tax, unless an exception applies.
Eligibility for any of these exceptions is determined by several factors, including the type of account from which the distribution is made. Making a wrong move can result in a retirement account owner losing eligibility for an exception. In some cases, exceptions can only be claimed through proper reporting on the individual's tax return.
Learning Objectives
Upon completing this course, participants will be able to:
To be able to identify distributions that might be subject to the 10% early distribution penalty;
To ensure that clients who qualified for the exceptions do not pay the 10% early distribution penalty because of conflicting tax reporting by IRA custodians and plan trustees;
To understand the tax reporting requirements that apply to early distributions; and
To determine suitability for the substantially equal periodic payment program.
