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February 20, 2009

Early distribution

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Referring Cite

IRS § 72(t), Form 5329 and its instructions, IRS Publications 590 and 575

Additional Helpful Information

  • The early distribution penalty applies to 457(b) plans, but only to amounts that are received in a direct transfer or rollover from another type of eligible retirement plan.
  • If a 1099-R does not properly indicate whether the early distribution applies, the participant may file IRS Form 5329 to correct the reporting
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Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

Salary Deferral Contribution

Definition A contribution made pursuant to a participant’s election to have a portion of his/her salary/wages  contributed to his/ her employer sponsored plan  rather than

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