Permanent disability
Is someone declared with permanent disability be exempt from the 10% penalty on his IRA distributions even though he is not 59 1/2 yet?
Is someone declared with permanent disability be exempt from the 10% penalty on his IRA distributions even though he is not 59 1/2 yet?
Permalink Submitted by Alan - IRA critic on Wed, 2021-08-04 17:48
Yes. The person should secure a letter from their MD stating that they are disabled per the terms of Sec 72(m(7) and provide it to their IRA custodian so that the 1099R can be coded 3 denoting a disability distribution. That will eliminate the need to file Form 5329 to claim the exception and it will also be more credible to the IRS than a 5329.