See Pub. 590; Pub. 560, Retirement Plans for Small Business; Pub. 575; Pub. 969, Health Savings Accounts and Other Tax-Favored Health Plans; Pub. 970, Tax Benefits for Education; Pub. 4492-A; and Pub. 4492-B.taxmap/instr2/i5329-005.htm#TXMP24c87cdataxmap/instr2/i5329-005.htm#TXMP5511e367
If both you and your spouse are required to file Form 5329, complete a separate form for each of you. Include the combined tax on Form 1040, line 59.taxmap/instr2/i5329-005.htm#TXMP29c0ba89
If you are filing an amended 2008 Form 5329, check the box at the top of page 1 of the form. Do not use the 2008 Form 5329 to amend your return for any other year. Instead, see Prior tax years on page 1.taxmap/instr2/i5329-005.htm#TXMP1e64dde7
In general, if you receive an early distribution (including an involuntary cashout) from an IRA, other qualified retirement plan, or modified endowment contract, the part of the distribution included in income generally is subject to an additional 10% tax. But see Exception for Roth IRA Distributions on this page.
The additional tax on early distributions does not apply to any of the following:
- A qualified disaster recovery assistance distribution. See Form 8930 for more details.
- A qualified recovery assistance distribution. See Pub. 4492-A for more details.
- An economic stimulus payment directly deposited into your IRA and withdrawn by the due date of your tax return (including extensions).
- A qualified HSA funding distribution from an IRA (other than a SEP or SIMPLE IRA). See Pub. 969 for details.
- A distribution from a traditional or SIMPLE IRA that was converted to a Roth IRA.
- A rollover from a qualified retirement plan to a Roth IRA.
- A distribution of certain excess IRA contributions (see the instructions for lines 15 and 23 on page 4).
Note.. Any related earnings withdrawn with excess contributions are subject to the additional tax on early distributions if you were under age 59 at the time of the distribution.
- A distribution of excess contributions from a qualified cash or deferred arrangement.
- A distribution of excess aggregate contributions to meet nondiscrimination requirements for employee contributions and matching employer contributions.
- A distribution of excess deferrals.
- A distribution from an eligible governmental section 457 deferred compensation plan to the extent the distribution is not attributable to an amount transferred from a qualified retirement plan (excluding an eligible section 457 deferred compensation plan).
See the instructions for line 2 on page 3 for other distributions that are not subject to the tax.taxmap/instr2/i5329-005.htm#TXMP633443ce
Enter the amount of early distributions included in income that you received from:
- A qualified retirement plan, including earnings on withdrawn excess contributions to your IRAs included in income in 2008, or
- A modified endowment contract entered into after June 20, 1988.
Certain prohibited transactions, such as borrowing from your IRA or pledging your IRA assets as security for a loan, are considered to be distributions and may also cause you to owe the additional tax on early distributions. See Pub. 590 for details.taxmap/instr2/i5329-005.htm#TXMP78490b63
If you received an early distribution from a Roth IRA, first allocate the amount on your 2008 Form 8606, line 19 (not including any qualified disaster recovery assistance distributions or qualified recovery assistance distributions), in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount).
- Your 2008 Form 8606, line 20.
- Your 2008 Form 8606, line 22*.
- Your 1998 Form 8606, line 16.
- Your 1998 Form 8606, line 15.
- Your 1999 Form 8606, line 16.
- Your 1999 Form 8606, line 15.
- Your 2000 Form 8606, line 16.
- Your 2000 Form 8606, line 15.
- Your 2001 Form 8606, line 18.
- Your 2001 Form 8606, line 17.
- Your 2002 Form 8606, line 18.
- Your 2002 Form 8606, line 17.
- Your 2003 Form 8606, line 18.
- Your 2003 Form 8606, line 17.
- Your 2004 Form 8606, line 18.
- Your 2004 Form 8606, line 17.
- Your 2005 Form 8606, line 18.
- Your 2005 Form 8606, line 17.
- Your 2006 Form 8606, line 18.
- Your 2006 Form 8606, line 17.
- Your 2007 Form 8606, line 18.
- Your 2007 Form 8606, line 17.
- Your 2008 Form 8606, line 18.
- Your 2008 Form 8606, line 17.
- Your 2008 Form 8606, line 25c.
*If applicable, reduce this amount by any amounts attributable to qualified disaster recovery assistance distributions or qualified recovery assistance distributions.
Then, include on line 1 of Form 5329 the amount from your 2008 Form 8606, line 25c, plus the amount, if any, allocated to the amount on your 2008 Form 8606, line 20, and the amount, if any, allocated to line 18 of your 2004 through 2008 Forms 8606. Also include the amount, if any, from your 2008 Form 8606, line 20, on Form 5329, line 2, and enter exception number 09.
You converted $20,000 from a traditional IRA to a Roth IRA in 2004 and converted $10,000 in 2005. Your 2004 Form 8606 had $5,000 on line 17 and $15,000 on line 18 and your 2005 Form 8606 had $3,000 on line 17 and $7,000 on line 18. You made Roth IRA contributions of $2,000 for 2004 and 2005. You did not make any Roth IRA conversions or contributions for 2006 through 2008, or take any Roth IRA distributions before 2008. On July 9, 2008, at age 53, you took a $33,000 distribution from your Roth IRA. Your 2008 Form 8606 shows $33,000 on line 19; $29,000 on line 23 ($33,000 minus $4,000 for your contributions on line 22) and $0 on line 25a ($29,000 minus your basis in conversions of $30,000). First, $4,000 of the $33,000 is allocated to your 2008 Form 8606, line 22; then $15,000 to your 2004 Form 8606, line 18; $5,000 to your 2004 Form 8606, line 17; and $7,000 to your 2005 Form 8606, line 18. The remaining $2,000 is allocated to the $3,000 on your 2005 Form 8606, line 17. On line 1, enter $22,000 ($15,000 allocated to your 2004 Form 8606, line 18, plus the $7,000 that was allocated to your 2005 Form 8606, line 18). If you take a Roth IRA distribution in 2009, the first $1,000 will be allocated to the $1,000 remaining from your 2005 Form 8606, line 17, and will not be subject to the additional tax on early distributions.
For more details, see Are Distributions Taxable? in Pub. 590.taxmap/instr2/i5329-005.htm#TXMP3f0c5c34
The additional tax on early distributions does not apply to the distributions described below. Enter on line 2 the amount that can be excluded. In the space provided, enter the applicable exception number (01-12).
|01||Qualified retirement plan distributions (does not apply to IRAs) if you separated from service in or after the year you reach age 55 (age 50 for qualified public safety employees). |
|02||Distributions made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from an employer plan, payments must begin after separation from service). |
|03||Distributions due to total and permanent disability.|
|04||Distributions due to death (does not apply to modified endowment contracts).|
|05||Qualified retirement plan distributions up to (1) the amount you paid for unreimbursed medical expenses during the year minus (2) 7.5% of your adjusted gross income for the year. |
|06||Qualified retirement plan distributions made to an alternate payee under a qualified domestic relations order (does not apply to IRAs). |
|07||IRA distributions made to unemployed individuals for health insurance premiums.|
|08||IRA distributions made for higher education expenses.|
|09||IRA distributions made for purchase of a first home, up to $10,000.|
|10||Distributions due to an IRS levy on the qualified retirement plan.|
|11||Qualified distributions to reservists while serving on active duty for at least 180 days. |
|12||Other (see Other, below). Also, enter this code if more than one exception applies. |
| || |
The following exceptions also apply.
- Distributions incorrectly indicated as early distributions by code 1, J, or S in box 7 of Form 1099-R. Include on line 2 the amount you received when you were age 59 or older.
- Distributions from a section 457 plan, which are not from a rollover from a qualified retirement plan.
- Distributions from a plan maintained by an employer if:
- You separated from service by March 1, 1986;
- As of March 1, 1986, your entire interest was in pay status under a written election that provides a specific schedule for distribution of your entire interest; and
- The distribution is actually being made under the written election.
- Distributions that are dividends paid with respect to stock described in section 404(k).
- Distributions from annuity contracts to the extent that the distributions are allocable to the investment in the contract before August 14, 1982.
For additional exceptions that apply to annuities, see Pub. 575.taxmap/instr2/i5329-005.htm#TXMP6257b90a
If any amount on line 3 was a distribution from a SIMPLE IRA received within 2 years from the date you first participated in the SIMPLE IRA plan, you must multiply that amount by 25% instead of 10%. These distributions are included in boxes 1 and 2a of Form 1099-R and are designated with code S in box 7.