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IRS.gov Website
Instructions for Form 5329
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Additional Information(p2)

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See Pub. 590, Individual Retirement Arrangements; Pub. 560, Retirement Plans for Small Business; Pub. 575, Pension and Annuity Income; Pub. 969, Health Savings Accounts and Other Tax-Favored Health Plans; Pub. 970, Tax Benefits for Education; and Pub. 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.
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Specific Instructions(p2)

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Joint returns.(p2)
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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 58.
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Amended returns.(p2)
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If you are filing an amended 2011 Form 5329, check the box at the top of page 1 of the form. Do not use the 2011 Form 5329 to amend your return for any other year. For information about amending a Form 5329 for a prior year, see Prior tax years, earlier.
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Part I—Additional Tax on Early Distributions(p2)

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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 Distributions from a designated Roth account and Distributions from Roth IRAs, later.
The additional tax on early distributions does not apply to any of the following:
See the instructions for line 2, later, for other distributions that are not subject to the tax.
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Line 1(p2)

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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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Distributions from a designated Roth account.(p2)
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If you received an early distribution from your designated Roth account, include on line 1 the amount of the distribution that you must include in your income. You will find this amount in box 2a of your 2011 Form 1099-R. If you made an in-plan Roth rollover in 2010 or 2011, you may also need to include a recapture amount on line 1 (discussed next).
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If you did not make an in-plan Roth rollover in 2010 or 2011, you only need to include on line 1 of this form the amount from box 2a of the 2011 Form 1099-R reporting the early distribution.
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Recapture amount subject to the additional tax on early distributions.
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If you made an in-plan Roth rollover in 2010 or 2011 and you received an early distribution for 2011, the recapture amount to include on line 1 is a portion of amounts you rolled over in 2010 and 2011.
The recapture amount that you must include on line 1 will not exceed the amount of your early distribution; and, for purposes of determining this recapture amount, a rollover amount (or portion of a rollover) will only be allocated to an early distribution once.
For more information about the recapture amount for distributions from a designated Roth account, including how to calculate it, see Pub. 575.
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Distributions from Roth IRAs.(p2)
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If you received an early distribution from your Roth IRAs, include on line 1 the part of the distribution that you must include in your income. You will find this amount on line 25 of your 2011 Form 8606. You will also need to include on line 1 the following amounts.
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If you did not convert or roll over an amount to your Roth IRAs in 2007 through 2011, or have a first-time homebuyer distribution, you only need to include the amount from line 25 of your 2011 Form 8606 on line 1 of this form.
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Recapture amount subject to the additional tax on early distributions.
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If you converted or rolled over an amount to your Roth IRAs in 2007, 2008, 2009, 2010, or 2011 and you received an early distribution for 2011, the recapture amount to include on line 1 is the amount, if any, of the early distribution allocated to the taxable portion of your 2007 through 2011 conversions or rollovers.
Generally, an early distribution is allocated to your Roth IRA contributions first, then to your conversions and rollovers on a first-in, first-out basis. The recapture amount is the amount of the conversion or rollover that was subject to tax in the year of the conversion or the rollover. An early distribution allocated to a conversion or rollover is first allocated to the taxable portion.
The recapture amount that you must include on line 1 will not exceed the amount of your early distribution; and, for purposes of determining this recapture amount, a contribution, conversion, or rollover amount (or portion thereof) will only be allocated to an early distribution once.
For more information about the recapture amount for distributions from a Roth IRA, including how to calculate it, see Pub. 590. Also, see the Example below that illustrates a situation where a taxpayer must include a recapture amount on line 1.

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Example.(p3)

You converted $20,000 from a traditional IRA to a Roth IRA in 2007 and converted $10,000 in 2008. Your 2007 Form 8606 had $5,000 on line 17 and $15,000 on line 18 and your 2008 Form 8606 had $3,000 on line 17 and $7,000 on line 18. You made Roth IRA contributions of $2,000 for 2007 and 2008. You did not make any Roth IRA conversions or contributions for 2009 through 2011, or take any Roth IRA distributions before 2011.
On July 9, 2011, at age 53, you took a $33,000 distribution from your Roth IRA. Your 2011 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 25 ($29,000 minus your basis in conversions of $30,000) and line 36.
First, $4,000 of the $33,000 is allocated to your 2011 Form 8606, line 22; then $15,000 to your 2007 Form 8606, line 18; $5,000 to your 2007 Form 8606, line 17; and $7,000 to your 2008 Form 8606, line 18. The remaining $2,000 is allocated to the $3,000 on your 2008 Form 8606, line 17. On line 1, enter $22,000 ($15,000 allocated to your 2007 Form 8606, line 18, plus the $7,000 that was allocated to your 2008 Form 8606, line 18).
If you take a Roth IRA distribution in 2012, the first $1,000 will be allocated to the $1,000 remaining from your 2008 Form 8606, line 17, and will not be subject to the additional tax on early distributions.
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Additional information.(p3)
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For more details, see Are Distributions Taxable? in Pub. 590.
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Line 2(p3)

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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) you receive after separation 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.(p3)
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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(p3)

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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.