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    susky143's Avatar
    susky143 Posts: 2, Reputation: 1
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    #1

    Apr 1, 2008, 01:09 PM
    10% penalty tax - forgiveness
    I was laid off in 01-07. I received my employee stock option plan Employee Cash Bal Ret Plan which I cashed out and something from Fidelity Onvestments which I also cashed out. They were not IRA's. The reason I cashed them out was to pay my COBRA and to start my own consulting business. In 09-07 I took a full time position. Can I reduce this to 0% on either one or both?
    The criteria defined for this seems that I meet criteria number 7.
    Thank you!
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Apr 3, 2008, 09:58 AM
    What do you mean by "criteria number 7"? Did you receive a 1099-R form for these distributions, and if so, what reason code do they show?

    The 10% penalty can not be forgiven unless you meet specific criteria. If you are under 55 years of age, are not disabled , and aren't using this money because of very high medical bills (> 7.5% of iincome) then you owe the 10% penalty.
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