By Mike Miles
October 16th, 2013 | Uncategorized
Q. As a current furloughed government employee, can I withdraw money from my IRA and not be taxed the additional 10 percent under the exception: being unemployed and paying for health insurance premiums?
A. From IRS Publication 590:
Even if you are under age 59½, you may not have to pay the 10 percent additional tax on distributions during the year that are not more than the amount you paid during the year for medical insurance for yourself, your spouse and your dependents. You will not have to pay the tax on these amounts if all of the following conditions apply:
* You lost your job.
* You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.
* You receive the distributions during either the year you received the unemployment compensation or the following year.
* You receive the distributions no later than 60 days after you have been re-employed.