10% penalty exception for public safety worker
Is there *any* way this exception can carry over when the money is moved from the plan to an IRA? I have always understood the answer to be a resounding “no,” but I have a CPA telling the client that he (client) *never ever* pays the penalty on the money, even if it’s moved to an IRA.
I think that is flat-out wrong, but is there any esoteric rule/reg/etc. (perhaps instituted by SECURE?) that might allow this exception to carry over, and I am overlooking it?
Please and thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2021-09-22 00:20
You are correct and the CPA is wrong. Client can refer the CPA to Sec 72(t)(10), and the IRS rollover chart which indicates this exception does not apply to IRAs.