Early disabled Roth IRA distribution

[Avs19]

Hi,

My client recieved a 1099R, code J for an early distribution he made last year. According to publication 590-B, the distibution is not subject to tax or penalty. Does anyone know how to notate this in Proseries?

Thanks

[taxshack]

It is subject to penalty unless they had basis.  You want to find out the cumulative basis and enter it on the IRA Info worksheet.

[Avs19]

30K distribution with 10K in basis. 

Am I missing something in the IRS publication 590-B where it says that if you're disabled, than an early distribution from a Roth IRA pays no tax or penalty?

Thanks

[jeffmcpa2010]

Does entering the exempt amount in Question 1, column a line c of form 5329 work?

[Avs19]

That takes care of the penalty but it's still taxing the 30K. I'm not too concerned about the basis at this point because it's only 10k.

[taxshack · Accepted solution]

Sorry I missed in the title that it said disabled.  Disregard what I said before.  I think you have to go to the 1099-R worksheet and check the box that is below 19-1 that says to check if Qualified.

[Avs19]

Tried that but it doesn't do anything

[Avs19]

Actually, that did do it. I just had to check the box that he openned the IRA account before 2018.

Thanks for your help!

[taxshack]

Yay! I'm glad that was the answer.