Group Life & AnnuitiesQuestion 115 of 315
What is the additional IRS penalty (on top of ordinary income tax) for taking a taxable withdrawal from a non-qualified annuity before age 59½?
a.5%
b.7.5%
c.10%
d.20%
Explanation
Internal Revenue Code §72(q) imposes a 10% additional tax on the taxable portion of a withdrawal taken from an annuity before age 59½. This penalty is added to the ordinary income tax on the gain portion of the early distribution.
Law Reference: 26 U.S.C. §72(q)Practice all 315 questions free — no signup required.
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