TaxBuzz Guides
Categories
Military Tax Issues

Need help selecting a firm?

Tell us about your project and get introduced to the best accounting and tax firm for your needs.

Get Started

Qualified Military Reservist Distribution Early Withdrawal Exemption

In certain cases, when military reservists are called to active duty, they are allowed to receive early withdrawal distributions from retirement accounts and select other accounts. However, there are eligibility requirements that must be met. 

Qualified reservists are permitted penalty-free withdrawal from IRAs, 401(k)s, and other arrangements if ordered or called to active duty. (Code Sec. 72(t)(2)(G)(iv)).

A “qualified reservist distribution” is any distribution to an individual if:

  • the distribution is from an individual retirement plan, or from amounts attributable to employer contributions made as elective deferrals described in Code Sec. 402(g)(3)(A), Code Sec. 402(g)(3)(C), or Code Sec. 501(c)(18)(D)(iii);
  • the individual was, by reason of being a member of a “reserve component” (as defined in 37 USC 101), ordered or called to active duty for: (i) a period in excess of 179 days, or (ii) an indefinite period;,
  • the distribution is made during the period: (i) beginning on the date of the order or call to active duty, and (ii) ending at the close of the active duty period.
Previous Topic:   Military and Spouse Residence or Domicile
Next Topic:   Taxation of Retired Military Disability Compensation

TaxBuzz Guides

Tax Filing Status Overview
Dependents
Dependents Filing Status Case Studies
Tax Exemptions
Divorce and Separation Tax
Death of a Taxpayer Overview
Compensation of Clergy
Co-Owned Real Property
Military Tax Issues
Nonresident & Resident Aliens
Community Property
Age-Related Tax Issues
Registered Domestic Partners
Foreign Asset Tax Reporting Requirements
Tax Issues With Gold & Other Precious Metals
Crowdfunding
Minimize Identity Theft & Fraud
Cryptocurrency
Tax Potpourri
California Residency Issues