In-service distribution

[PensionNewbee]

what are the ramifications if a participant over 59 1/2 wants to take a partial distribution of her account? The plan allows for it - it is my understanding that such a distribution is not subject to the 10% early withdrawal penalty - but is it subject to the 20% mandatory withholding? The distribution is taxable as ordinary income and reported on Form 1099-R, is that correct?

[Archimage]

You got it.

[Blinky the 3-eyed Fish]

To be specific, the 20% would apply if the distribution was rollover eligible. You didn't specify the source in your post.

[PensionNewbee]

the sources available are deferral, match and profit sharing. It seems to me that all sources are eligible for rollover, so then, the distribution IS subject to the 20% withholding, is that correct?

[TBob]

If the distribution that you are referring to is a hardship distribution, then it is not eligible for rollover.

[PensionNewbee]

not a hardship. An in-service distribution available to participants who have attained age 59 1/2.

[Brian Gallagher]

state tax may also apply, depending on the state.