1099r

[gail34]

What is the name of your state? ky

I had someone bring in two 1099R today, this is their only income. Received this as part of their divorce settlement. One is coded as 1 early distribution no exception apply but the other one is coded as 2 early distribution exception apply. I think this must be wrong. They are from two different account at different places. How would you handle this?? Do you know anyway this wouldn't be subject to 10% penatly. She is only 36, but she is applying for disability, but I think it was after she received this money.
Any thoughs would be appreciated.
Sharon

 

[Snipes5]

I hope you aren't her tax preparer.

The one with the code 2 is not subject to penalty.

The one with Code 1 may not be subject to penalty if it was distributed pursuant to a Qualified Domestic Relations Order, QDRO. You will have to ask some questions to find out if this is the case.

If so, use form 5329 to exempt that money based on whatever reason code fits the situation.

The disability thing isn't particularly relevant.

Snipes

 

[gail34]

Sorry, I thought that if she receive the payment as one lump some and her
ex is not at retirement age, It was still penalized as it was an early distributions. QDRO are very technical and she never even hear it mention, she is checking with her lawyer.
Sharon