penalty exception for disability

[Bill Tubbs]

MFJ couple, both aged 50. She has 1099-R (not IRA) with code 1. The money was taken out when it was determined husband was 100% disabled (is now receiving Soc Sec Disability). If the 1099-R had been his, then I would not hesitate to use exception #3 (Disability) on Form 5329 to wipe out the penalty. But, my question is since it was HER 1099-R can we still use exception #3 with HIS disability? If not for the full amount, how about for at least 1/2 of it (Wisconsin is community property)?

Thanks,
Bill

[Lion]

I don't think so

I don't think so, since there's no such thing as a joint IRA, even in a community property state. But, you might have a point on the WI return. On the federal, does she qualify for another exception, such medical (do have joint medical on a joint return!) or to pay health premiums or she was unemployed to take care of hubby?

[Bill Tubbs]

No other exception

No other exception is available for them. Insurance covered enough of the medical so they're below the 7.5% medical, and even if they did pay insurance premium the disbursement was from her 401(k) -- not an IRA.

[Burke]

MFJ couple, both aged 50. She has 1099-R (not IRA) with code 1. The money was taken out when it was determined husband was 100% disabled (is now receiving Soc Sec Disability). If the 1099-R had been his, then I would not hesitate to use exception #3 (Disability) on Form 5329 to wipe out the penalty. But, my question is since it was HER 1099-R can we still use exception #3 with HIS disability? If not for the full amount, how about for at least 1/2 of it (Wisconsin is community property)?
Thanks, Bill

This is a sad case, but she would not get a waiver since she is not the one disabled.