401K WITHDRAWAL
My age is 56 and I retired from MetLife as of July 1st 2016. My understanding is I can withdraw money from my
401K with out having the federal 10% penalty. I realize 20% for taxes need to be withheld. Does the 1099 have a certain code on it showing this type of distribution under these circumstances. Otherwise, how does one know? I now work with a different firm. Thank you,
Permalink Submitted by Alan - IRA critic on Thu, 2016-09-08 19:43
Distributions from the former 401k plan should be coded as 2 in Box 7 of the 1099R. That reflects the age 55 penalty exception. If for some reason MetLife fails to show code 2, you can override the 1099R using Form 5329 and entering exception code 01 on the form. Whether you are working at a new employer or not is immaterial to the penalty waiver on distributions from the old plan.