Medical Expense Exception
Hello,
I have a question regarding the early withdrawal exception for unreimbursed medical expenses. Is the calculation based on 10% of AGI or 7.5% of AGI? There seems to be conflicting resources from the IRS. Both pages below were reviewed in 2022 by the IRS and say different things. What are your thoughts?
From IRS website…..amount of unreimbursed medical expenses (>10% AGI for 2021, >7.5% AGI; for 2017 – 2020) – https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions
From Pub 590: You have unreimbursed medical expenses that are more than 7.5% of your AGI….https://www.irs.gov/publications/p590b#en_US_2021_publink100090246
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2022-08-30 18:22
7.5% of AGI for 2022 and beyond. The 10% penalty exception automatically conforms to the AGI limit for itemizing medical deductions which has now been made permanent at 7.5% of AGI. The IRS must have neglected to update their penalty exceptions chart.