72(t) and disability

L1: 72(t) and disabilityI retired In 2000 at the age of 53 from my company ( Bellsouth) and began taking substantially equal periodic payments from my 401K. In 2003, I sustained an injury which rendered me disabled and am now receiving Social Security disability payments. My question is this: Would I would be exempt form the 10% tax (because of my disability) if I quit taking the distributions even though I have not completed the five years or attained the age of 591/2 ? (I am going to be 58 in July this year). Thanks for your assist. From what I can determine from the Publication 17 and instructions for form 5329, distribution code 3 applies to disability but it does not explain how. Wayne email: wayne321@bellsouth.net2004-06-09 06:59, By: fisherman, IP: [65.6.118.65]
L2: 72(t) and disabilityHello Wayne:
Yes, you may modify (terminate) your SEPP distributions by reason of disability and you will not be subject to the 10% surtax. This is allowable pursuant to IRC 72(t)(4).
However, the IRS’s definition is not necessarily the same as the SSA’s. In order to qualify, your disability must be total and permanent.
TheBadger
wjstecker@wispertel.net
2004-06-09 08:19, By: TheBadger, IP: [66.250.23.21]