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Excise tax on certain early distributions
More information
Before receiving a distribution from the Plan, you will receive a Special Notice Regarding Plan Payments that provides more detailed information regarding the above rules as well as special tax rules that may apply.
All distributions from the Plan (other than those from your Roth pay deferral account, Roth rollover account, and Roth In-Plan Conversion account) that are not rolled over to an IRA or another plan are taxable income. Further, if you receive a distribution from the Plan before age 59-1/2, federal law imposes an excise tax equal to 10% of the amount of the distribution in addition to regular income tax. The 10% excise tax is imposed unless one of the following exceptions applies:
  • The distribution is made as a result of your termination of employment during or after the year you attain age 55;
  • The distribution is made as a result of your death or disability;
  • The distribution does not exceed your deductible medical expenses (medical expenses which exceed 7.5% of your adjusted gross income);
  • The distribution is made under a qualified domestic relations order;
  • The distribution consists of excess pay deferral amounts; or
  • The distribution is part of a series of substantially equal payments over your life expectancy or over the joint life expectancy of you and your spouse.