Penalty tax

(redirected from Withdrawal Penalty)

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 ?
For 3-month and 6-month CDs, the most common early withdrawal penalty is three months' worth of interest.
If the successful tenderer for reasons attributable to the Contracting Authority to terminate the contract, or the exercise forced withdrawal penalty, the contractor has not made part of the contract (reduced% deviation) of net pay is equal to 20% penalty tax.
You'll also have paid a hefty early withdrawal penalty.
The firm's "2014 Early CD Withdrawal Penalties Survey" measured early withdrawal penalty policies on 3-month, 6-month, 1-year, 2-year and 5-year CDs from May 5-14, 2014, at the top 10 banks and thrifts in the 10 largest U.
5, there is an additional 10 percent early withdrawal penalty.
Customers may withdraw their money from any account that's been transferred to Home Federal without an early withdrawal penalty until they enter into a new deposit agreement with Home Federal, as long as the deposits haven't been put up as collateral for loans.
Victims told us they were verbally assured that they'd be no withdrawal penalty, only to be sued by Stockportbased RTA if they don't pay one.
Such withdrawals, although immediately includible in the employee's gross income, are not subject to the usual 10 % early withdrawal penalty.
The primary reason is a 10 percent early withdrawal penalty for any Qualified Plan distributions before the participant or owner is 59-and-a-half years old.
WHEN CLIENTS ARE DESPERATE FOR FUNDS because of unforeseen circumstances, CPAs can help them tap retirement funds without triggering the 10% early withdrawal penalty.
The individual must pay ordinary Federal and possibly state income taxes on the money, and probably an additional 10% early withdrawal penalty if he or she is younger than 59 1/2.
You may withdraw the money, but, similar to an IRA, the withdrawn funds are subject to federal income tax, plus a 10% early withdrawal penalty if you are under age 65.