Penalty tax

Penalty tax

A federal tax that can be applied if a plan holder does not meet certain requirements when making withdrawals from a tax-advantaged retirement plan (for instance, if the plan holder has not reached age 59-1/2). This penalty tax is owed in addition to any income taxes due.

Penalty Tax

An excise tax imposed upon an unauthorized withdrawal from a retirement account, such as a 401(k) or an IRA. Most commonly, a penalty tax is assessed when one makes a withdrawal before the age of 59 1/2. See also: Hardship withdrawal.
References in periodicals archive ?
Michigan is the only state in the country that imposes a penalty tax on individuals and businesses that purchase health insurance," said Michigan Chamber President & CEO Rich Studley.
If reasons attributable to the Customer Service Provider to terminate the contract, cancellation or exercise of sanctioning forced Provider from this contract is not yet completed - the percentage difference reduced - is part of net pay of 20% of penalty tax.
However, with ObamaCare constantly "evolving," the penalty tax will soon match or surpass the premium costs, in order to force "universal participation," a foundational goal of ObamaCare.
Also, if the non-qualified SPIA is part of a Section 1035 exchange from an existing deferred annuity, this will have a bearing on whether the pre-59-and-a-half penalty tax of 10 percent will apply to the taxable part of the non-qualified SPIA.
I can understand a penalty tax for someone who is single and remaining in a three or four-bed property, but why is there a need to tax a tenant for having just one spare bedroom?
Its additional tax payments, including a penalty tax, are estimated at 300 million yen, the sources said.
Denso pays penalty tax over income of Singapore unit
Under the most significant generally applicable exception, the 10% penalty tax will not apply to any distributions on or after the date the taxpayer reaches age 59 1/2.
If a taxpayer is under 59 1/2 years old, IRC [section] 72(t) generally imposes an additional penalty tax of 10% on withdrawals.
31, 2007, to make early withdrawals (prior to age 591/2) from certain retirement plans without triggering the 10-percent penalty tax imposed on such withdrawals under IRS Code Sec.
There are also stiff penalties (retro-active penalty tax on all amounts withdrawn) if 72T distributions are not done correctly, so professional help is definitely needed.
The existence of earnings and profits exposes the S Corporation to a potential penalty tax if it has excessive passive investment income or could subject the corporation to the loss of its S election.