Separation From Service Dates
Hi Alan,
I have a client who retired last July, then turned 55 in December. He is now eligible to take a distribution from his old employer’s qualified plan. Does he still qualify for the age 55 separation from service 10% penalty exception since he retired in the year he turned 55 but before he actually turned 55?
Thanks!
Permalink Submitted by Alan - IRA critic on Sat, 2017-03-25 17:28
Yes, he qualifies. The age 55 separation exception is met as long as the separation occurs IN or after the year the participant turns 55. The 1099R issued for a distribution should be coded 2 to reflect this exception.