1099R, zero taxable, subj to 10% penalty

[Possi]

WTH?
So, why would the 1099R show a non-taxable distribution is subj to a 10% penalty?

What is subj to the penalty? Box 1 distribution OR the taxable portion of the distribution?

[Gary2]

What type of plan?

If you convert a traditional IRA into a Roth in year one, you'll pay taxes on it in year one. If you take it out in year 3, there won't be any income taxes - they've already been paid - but there will be a 10% penalty because of the five year rule for conversions and rollovers.

[Possi]

Tax free combat zone

The entire distribution was from combat-zone tax free money that was put into a TSP and taken out. So the distribution is tax free.

So, why in the world would it be subject to a penalty?

[mactoolsix]

Early Withdrawal Penalty Tax

Depending on your age when you leave Federal service as well as your withdrawal option and its timing, you may be subject to the IRS 10% early withdrawal penalty tax on the taxable portion of your withdrawal.

From: https://www.tsp.gov/planparticipatio...thdrawal.shtml

Are you sure all the codes are correct?

Mike

[Possi]

Thanks!

Depending on your age when you leave Federal service as well as your withdrawal option and its timing, you may be subject to the IRS 10% early withdrawal penalty tax on the taxable portion of your withdrawal.

From: https://www.tsp.gov/planparticipatio...thdrawal.shtml

Are you sure all the codes are correct?

Mike

Yes. Thanks, Mike. That's just exactly what I needed to know. This TSP is new to me. Great link!