Q. I have a qualified annuity contract, is it possible to have an early withdrawal before age 59.5 and avoid the IRS 10% penalty?
A. Yes, there is a way to avoid the IRS 10% early withdrawal penalty on any withdrawals of either interest or qualified premium made prior to the age 59.5, but most people probably won't qualify for it.
In order to avoid the IRS 10% premature distribution penalty tax before age 59.5, the taxpayer must be able to qualify as being "disabled" based on the Internal Revenue Code - being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.
A. Yes, there is a way to avoid the IRS 10% early withdrawal penalty on any withdrawals of either interest or qualified premium made prior to the age 59.5, but most people probably won't qualify for it.
In order to avoid the IRS 10% premature distribution penalty tax before age 59.5, the taxpayer must be able to qualify as being "disabled" based on the Internal Revenue Code - being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.
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