Retired Corrections officer large amount taken out of retirement

[barosser]

TP reitred from service as a corrections officer 2months after he qualified for retirement age 50, he Received a 1099-R for his monthly payments coded 2. He then decided to take a large distribution to pay off his house. This 100K is coded 1. Does he pay the 10% penalty since this is not a distribution of scheduled equal payments. Or since he qualifies as a PSO can he take exemption code 1 since he was 50 and a PSO. Have waivered on this but thinking he sould not have to be 10K penalty on the large distribution.

Thanks for the advise in advance, Come on Monday.

[jasdlm]

Agreed. Pub 575.

Additional exceptions for qualified retirement plans. The tax does not apply to distributions that are:

• From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees) (see Separation from service , later),

Separation from service. In order to meet the requirements for the first exception in the list above, you must have separated from service in or after the year in which you reach age 55 (or age 50 for qualified public safety employees). You cannot separate from service before that year, wait until you are age 55 (or age 50 for qualified public safety employees), and take a distribution.

Qualified public safety employees. If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. You are a qualified public safety employee if you provided police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50.