[Ironbutterfly]

Hus is waiting hearing for ALJ within next few months. Hus was put on disability insurance end of 2011 and still remains until he gets approved for SSDI, which he was denied first, now next step ALJ hearing. I am wondering if anyone has filed their taxes before, withdrawn money from their 401K or other plan, and not had to pay 10% penalty for early withdrawal because they were disabled(via terms Irs, which you receive disability payments) via Long term insurance through employer.

I have researched this and schedule R is credit for disability, but it is based on AGI. If over AGI limit, you can't take the credit, which is our case. However, do we need to obtain a physician statement so that we don't get penalized 10% early withdrawal?

We have an appt with CPA in next month, but I am wondering when hus goes to dr if he needs him to get this statement and if we need to send in to IRS. Anyone dealt with these issues here?

[Mz Migraine]

I did cash in my IRA and did not have to pay the penalty fee. This was done around 2001-2002. Sorry, I forgot the documentations I had to present to void out the 10% fee. I do remember when I did cash out, I was not on SSDI yet. Still in the early process stage (before reconsideration & ALJ phases).
I seem to remember everything was done through the bank that held my IRA acct. They did all the paperwork and submitted to the IRS. More than likely the bank had to obtain a statement or some form from my neurologist to forward to the IRS. All this was done prior to me receiving a check! Everything was done electronically, so the check was deposited into my account within 48 hours after the IRS received the pertinent documents.

Also not sure if the IRA vs IRS rules have changed since 2001-2002.

[Ironbutterfly]

Originally Posted by Mz Migraine

I did cash in my IRA and did not have to pay the penalty fee. This was done around 2001-2002. Sorry, I forgot the documentations I had to present to void out the 10% fee. I do remember when I did cash out, I was not on SSDI yet. Still in the early process stage (before reconsideration & ALJ phases).
I seem to remember everything was done through the bank that held my IRA acct. They did all the paperwork and submitted to the IRS. More than likely the bank had to obtain a statement or some form from my neurologist to forward to the IRS. All this was done prior to me receiving a check! Everything was done electronically, so the check was deposited into my account within 48 hours after the IRS received the pertinent documents.

Also not sure if the IRA vs IRS rules have changed since 2001-2002.

Thanks for replying. Ours was done via investment company. It has to do with 1099's and the distribution code on 1099 now a days. You have to fill out a form if code is such and such,but you qualify for exemption for 10%, etc. Will keep trying to find out more on all of this....thanks again