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MILITARY PENSIONS

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Bydlzallestaxes

L1: MILITARY PENSIONSSomeone retired from the USAF after 20 years of service, and is age 45.
Are military pensions, or company pension plans, eligible for EXCEPTION 02 re SEPP distributions ? I would not think so because they are not based upon the usual SEPP calculations, but are equal monthly payments from the employer/government usually based upon earnings history, and not an account balance.2014-02-10 18:12, By: dlzallestaxes, IP: [96.245.107.94]

L2: MILITARY PENSIONSdlz, I believe that military pensions are considered “non qualified plans” and therefore are not subject to the penalty in the first place. If so, the Box 7 would either show Code 2 for the same reason as a non qualified 457bor possibly code 7 even if pensioner is under 59.5. The SEPP exception would not be needed or apply.2014-02-10 18:53, By: Alan S, IP: [24.116.67.233]

L2: MILITARY PENSIONSYou are talking apples and oranges, military retired pay is subject to ordinary income tax and you will get a 1099-R , age has nothing to do with it.2014-02-12 13:14, By: Beechnut, IP: [67.235.101.95]

L3: MILITARY PENSIONSNote that the subject is the early withdrawal penalty, not the ordinary income tax due. Obviously, there will be ordinary income tax due.2014-02-13 02:04, By: Alan S, IP: [24.116.67.233]

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