Check out some similar questions!

LisaB4657 · Apr 2, 2009, 08:26 AM

Where can I find the specific requirements and procedure for obtaining a hardship waiver of the 10% penalty for early distribution from a traditional IRA?

ebaines · Apr 2, 2009, 09:45 AM

Here are the exceptions for having to pay the 10% earlywithdrawal penalty from an IRA:

• You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
• The distributions are not more than the cost of your medical insurance.
• You are disabled.
• You are the beneficiary of a deceased IRA owner.
• You are receiving distributions in the form of an annuity.
• The distributions are not more than your qualified higher education expenses.
• You use the distributions to buy, build, or rebuild a first home.
• The distribution is due to an IRS levy of the qualified plan.
• The distribution is a qualified reservist distribution.

LisaB4657 · Apr 2, 2009, 09:53 AM

Originally Posted by ebaines

Here are the exceptions for having to pay the 10% earlywithdrawal penalty from an IRA:

• You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
• The distributions are not more than the cost of your medical insurance.
• You are disabled.
• You are the beneficiary of a deceased IRA owner.
• You are receiving distributions in the form of an annuity.
• The distributions are not more than your qualified higher education expenses.
• You use the distributions to buy, build, or rebuild a first home.
• The distribution is due to an IRS levy of the qualified plan.
• The distribution is a qualified reservist distribution.

Thank you. I'm familiar with these exceptions. I was wondering if there were any other ways to get a hardship waiver.

ebaines · Apr 2, 2009, 10:59 AM

Originally Posted by LisaB4657

Thank you. I'm familiar with these exceptions. I was wondering if there were any other ways to get a hardship waiver.

The list I gave is it - there is no such thing as a "hardship waiver."

LisaB4657 · Apr 2, 2009, 11:17 AM

Based on what was said in this thread: https://www.askmehelpdesk.com/taxes/...ra-336569.html I was hoping there was a waiver I didn't already know about. Oh well. Thanks anyway.

ebaines · Apr 2, 2009, 11:24 AM

There's nothing in that thread that contradicts what I said. People sometimes use the term "hardship withdrawal" when talking about IRAs, even though the term applies to 401(k)'s. But even with 401(k)'s, hardship withdrawals are fully taxable and usually carry a 10% early withdrawal penalty.

LisaB4657 · Apr 2, 2009, 11:38 AM

I wasn't trying to suggest that the thread contradicted what you said. I was just hoping there was something more. As I said, thanks anyway.

chewingcud · Feb 2, 2010, 03:49 PM

Hey ebaines, why don't you change your handle from Ultra Member to "Ultra ".

AtlantaTaxExpert · Mar 1, 2010, 03:30 PM

Because ebaines has no control on his ranking; site admin does that!

sesmerelli · Sep 27, 2010, 06:04 PM

Can we have the 10% eliminated for that portion of the early withdrawal that went to medical expenses.

ebaines · Sep 28, 2010, 05:41 AM

Originally Posted by sesmerelli

Can we have the 10% eliminated for that portion of the early withdrawal that went to medical expenses.

Yes, to the extent that your medical expenses exceed 7.5% of your adjusted gross income. Consider this example: suppose your AGI is $50K - 7.5% of that is $3,750. If you withdraw $10K from your IRA before reaching age 59-1/2, and use it for medical expenses, you would owe the 10% penalty on the first $3,750 of the withdrawal, but no penalty on the remaining $6.250. You will have to submit form 5329 with your tax return to claim the exemption from the penalty. Of course, you also owe regular income tax on the portion of the withdrawal which is attributable to pre-tax contributions and earnings in the account (unless it's a Roth IRA that is at least 5 years old).