I have a client who is in his early 50's and would like to withdrawal money out of the gov't 457 plan. Researching the IRS site the 10% penalty doesn't apply. How is this reported at tax time? 1099-R and if so what is the code in box 7? Do I have to make adjustments on form 5329?
Any assistance would be appreciated, especially if you have come across this situation in the past.
"How is this reported at tax time?"
By the plan manager or the account manager.
"1099-R and if so what is the code in box 7?"
See the codes here:
See the tax topic here:
We don't know if this person still works there or not, has any other funds that were rolled into that plan or not.
"Do I have to make adjustments on form 5329?"
"In general, an eligible state or local government section 457 deferred compensation plan isn't a qualified retirement plan and any distribution from such plan isn't subject to the additional 10% tax on early distributions. However, any distribution attributable to amounts the section 457 plan received in a direct transfer or rollover from one of the qualified retirement plans listed above would be subject to the additional 10% tax."
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