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previous pagePrevious Page: Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts - Definitions
next pageNext Page: Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts - Part II—Additional Tax on Certain Distributions From Education Accounts
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taxmap/instr2/i5329-005.htm#TXMP55498dbd

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Additional Information


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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.
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Specific Instructions


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Joint returns.

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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.
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Amended returns.

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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.
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Part I—Additional Tax on Early Distributions


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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:
See the instructions for line 2 on page 3 for other distributions that are not subject to the tax.
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Line 1


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Enter the amount of early distributions included in income that you received from:
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.
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Exception for Roth IRA Distributions


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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). *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.

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Example.

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.
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Additional information.

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For more details, see Are Distributions Taxable? in Pub. 590.
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Line 2


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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).
No. Exception
01Qualified 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).
02Distributions 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).
03Distributions due to total and permanent disability.
04Distributions due to death (does not apply to modified endowment contracts).
05Qualified 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.
06Qualified retirement plan distributions made to an alternate payee under a qualified domestic relations order (does not apply to IRAs).
07IRA distributions made to unemployed individuals for health insurance premiums.
08IRA distributions made for higher education expenses.
09IRA distributions made for purchase of a first home, up to $10,000.
10Distributions due to an IRS levy on the qualified retirement plan.
11Qualified distributions to reservists while serving on active duty for at least 180 days.
12Other (see Other, below). Also, enter this code if more than one exception applies.
  
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Other.

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The following exceptions also apply.
For additional exceptions that apply to annuities, see Pub. 575.
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Line 4


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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.
previous pagePrevious Page: Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts - Definitions
next pageNext Page: Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts - Part II—Additional Tax on Certain Distributions From Education Accounts
 Use previous pagenext page to find additional occurrences of topic items.