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Level 4
December 7, 2019
Solved

Is there a 10% penalty for an early distribution from a Roth IRA when the individual is disabled

  • December 7, 2019
  • 2 replies
  • 39 views

Client received his first social security disability check in 2018 for several back years. In addition, client took $8k out of his Roth account in 2018. Tax program generated a 10% penalty because the 1099-R had a "J" distribution code. Client had no taxable income. Does the client have to pay the penalty,  since he is disabled. ? Client is 48 years old

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Best answer by Skylane

agree w/ sjrcpa. after you do what she said, take a look at form 5329 and instructions for the penalty exclusion.

2 replies

sjrcpa
Level 15
December 7, 2019
Did you enter the basis of the Roth IRA? Penalty is only applicable to the taxable portion.
The more I know the more I don’t know.
SkylaneIntuit Community ChampionAnswer
Intuit Community Champion
December 7, 2019

agree w/ sjrcpa. after you do what she said, take a look at form 5329 and instructions for the penalty exclusion.

If at first you don’t succeed…..find a workaround