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Tax.appeal.168, Tax Accountant
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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i\I live in California. These past few years have been tough

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i\I live in California. These past few years have been tough financially, and my husband and I have had to take monies out of our IRA accounts prematurely. We have paid the 10% penalty. NOW, the state of California is saying I owe them an ADDITIONAL 2.5% of the monies we took out. Is that correct?
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Did you include the distributed amounts as taxable income on your state return? Taxpayers who take distributions from IRAs in California, must include the amount of the withdrawal in both their federal and California income.

Please let me know if I can be of further assistance to you regarding this matter.

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Customer: replied 4 years ago.
Yes, that income was included in the federal AND california tax forms. What California is saying is that there is an additional OTHER TAX: Premature Distribution Tax that is an ADDITIONAL 2.5% of what I took out of my IRA, I have already been penalized 10%, I should not have to pay an additional 2.5%
Hello again,

I'm sorry to inform you of this but the 2.5 percent additional tax is not in error. SEE BELOW.


Certain distributions from IRAs are subject to additional penalties. If you take an IRA distribution before you reach age 59-1/2, California considers that an early distribution. In addition to any income taxes, you must pay the State of California a 2-1/2 percent penalty tax on the distribution.

Customer: replied 4 years ago.
Is that quote from something I can look up? Just wondering!
I could not find anything on the website
That is a partial quote, but you can verify information on Page 11 (top of page, right hand column) in the following California Franchise Booklet.

let me know if I can further assist you with this matter.

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