Separation From Service Dates

Submitted by Josh Harmon on Sat, 2017-03-25 16:31

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!



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.



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