10% penalty early distribution from Roth

[Art]

Client has been unable to work since Dec 2016 due to emotional/mental issues. He has applied for social security disability twice and has been refused. He is appealing again. He is 40 years old and has been living with his parents who have been providing support. In 2018 he had to withdraw money from his Roth account to help pay living expenses. His doctor can provide a letter stating his opinion regarding my client's disability, but he has not been classified as disabled by any government agency. Can we file he return as not apply the penalty? The 1099-R is coded J in box 7.

[JBP]

Has he owned the Roth for at least 5 years? Was his withdrawal less than his basis? If both are yes, then the 10% penalty would not apply regardless of disability status.

[TAXNJ]

See TTB 13-12. ROTH distributions as it applies to your scenario for clearer explanation to help support your decision.

[kathyc2]

Tax and penalty will only apply to the earnings. I'd look at if there is an exclusion for number based things like medical expenses before going with the opinion based disability.

[Art]

Thanks for all the replies. I will get contribution history from my client and review the TTB again.