Taxation of IRA Dist. Prior to Age 59 1/2 if SS Disab
Will the IRS waive the 10% penalty for IRA distributions prior to age 59 1/2 if the IRA owner is receiving Social Security disability payments.
Will the IRS waive the 10% penalty for IRA distributions prior to age 59 1/2 if the IRA owner is receiving Social Security disability payments.
Permalink Submitted by mk foss on Thu, 2012-05-10 16:40
The IRS has a strict definition of disability in Section 72(m) of the Internal Revenue Code. Whether someone qualifies by that definition is a matter of the facts and not the law. Many recipients are considered disabled for 72(m) purposes if they’re receiving Social Security disability but not all. You can look at Tax Court cases on this issue and the results are inconsistent.
Read the definition in the Code, if it seems right to claim disability for IRA distributions after that, go for it.