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Posted by A.G. Kalman on July 1, 2007, 6:06 pm
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PT wrote:
> Normally distributions from an IRA or qualified retirement
> plan are subject to a 10% penalty tax unless an exception
> applies. But I seem to recall that governmental plans
> aren't "qualified plans" - that is, they're not subject to
> IRS approval or scrutiny.
>
> So suppose a taxpayer received a separation payout from the
> California Teachers' Retirement System. None of the
> exceptions in the Form 5329 instructions apply. Is this
> distribution subject to the 10% penalty?
All of the CalStrs plans are qualified plans and the members
are subject to early withdrawal rules.
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