10% penalties for early pension withdrawal

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ddawn9598
ddawn9598 Member Posts: 1 Newcomer

I read that military retirement is excepted from the 10% penalty for withdrawing from your pension before you reach a certain age, however, how do I know if I was charged the 10% penalty? I filed on freetaxusa and when I entered the 1099R for my military retirement it increased the amount of taxes i owed from about 1500 to 5500 even though taxes were already take out of my military retirement and i claim 0? The retirement pay did not increase my tax bracket either

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  • Kellip
    Kellip FreeTaxUSA Agent Posts: 7
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    Hi ddawn9598! That is a great question. The IRS does state that certain military early withdrawal may qualify for an exception. It states that the distribution will NOT be subject to the 10% additional early distribution tax if the distributions were taken for qualified military reservists called to active duty." this information can be found by going to the following IRS link:

    https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

    When going through the software, if there is a possibility of the 10% penalty the software will typically provide an alert and allow you to make a selection for exceptions if you qualify. Without knowing more of the situation there is not a way to know if the penalty was charged or if you qualify for the exception. For security of your personal information, I would highly recommend signing into your account and contacting the Support team with your question. This will allow them to assist you with your individual situation.