Early disabled Roth IRA distribution

Forum|Forum|3 years ago
April 16, 2023
2 replies
25 views

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

ProSeries Professional

This topic has been closed for replies.

Best answer by taxshack

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.

taxshack

Level 6

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.

Preparing taxes is not my life, but my life is amazing because I prepare taxes.

A

Avs19Author

Level 6

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

taxshackAnswer

Level 6

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.

Preparing taxes is not my life, but my life is amazing because I prepare taxes.

J

jeffmcpa2010

Level 10

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

A

Avs19Author

Level 6

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.

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