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Thread: 10% Early Withdrawal Penalty Disability Exception

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  1. #18
    Join Date
    Jul 2005


    Thank you Burke.

    I ran that scenario and made the suggestion. I believe she was getting recommendations from everyone that just adds confusion. There probably would have been enough left over to make it to 59 1/2 just barely and avoid the rest of the penalty. Looking back at my worksheets the tax savings of moving to a IRA would have made a big difference.

    Anyways, I've been reading through many court cases memo and summary decisions. Many cases that involved depression makes it seem not too hopeful on getting it classified as disability. The one item that came up over and over was:

    Mental diseases (e.g., psychosis or severe psychoneurosis) requiring continued institutionalization or constant supervision of the individual.

    Many cases were lost because the Tax Court held that the taxpayer did not require constant supervision. Although each cases stated that it was based on the facts and circumstances of the individual. I found one case where the above was never mentioned with depression being the sole reason for disability.

    Without SSA Disability I find it hard for her to get the exception as noted. My first choice is NYEA suggestion... doing a extension with her paying in the penalty to see how the SSA hearing turns out. Trying to decide the best way

    Thank you all for your time.
    Last edited by geekgirldany; 02-16-2018 at 06:43 PM.

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