L1: Additional DistributionHi, I have been using a 72(t)distribution for 3 years now. But I have a short term (non-emergency) financial need. Can I take an additional amount out of my 401k and pay the penalty on that extra disbursement without jeopardizing my ongoing 72(t) status.2010-09-07 16:16, By: Rick, IP: [18.104.22.168]
L2: Additional DistributionYour SEPP 72-T is an IRA account, and is completely separate from 401-K accounts, “and ne’er the twain shall meet”.
If your401-K planallows it, take a loan of up to $ 50,000, which you have 5 years to repay.2010-09-07 16:52, By: dlzallestaxes, IP: [22.214.171.124]
L3: Additional DistributionBut if your SEPP account IS your 401k, then you cannot take an extra amount out without busting your plan. Or perhaps, your SEPP is using an IRA, but you referred to it as a 401k in error?
Bottom line, if the extra distribution comes out of an account that is NOT part of your SEPP, it will not affect your SEPP. If it comes out of the SEPP account, it will bust your plan.
There is a PLR that allowed an extra distribution for a higher education expense, but I would not be comfortable relying on just one such PLR.2010-09-07 17:39, By: Alan S., IP: [126.96.36.199]