Have a Tax Question? Ask a Tax Expert
Hi and welcome to our site!You may withdraw amounts held in my SIMPLE IRA at any time. Your employer can't require you to retain any portion of the contributions in your SIMPLE IRA or otherwise impose any withdrawal restrictions.Generally, the same tax results apply to distributions from a SIMPLE IRA as to distributions from a regular IRA. However, a special rule applies to a distribution received from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer’s SIMPLE IRA plan. Under this special rule, if the additional income tax on early distributions applies to a distribution within this 2-year period, then the rate of additional tax under this special rule is increased from 10 percent to 25 percent. If one of the exceptions to application of the early distribution tax under section 72(t) applies (for example, for amounts paid after age 59 1/2, after death, or as part of a series of substantially equal payments), the exception also applies to distributions within the 2-year period and the 25-percent additional tax does not apply.
It doesn't matter if you as an employees made salary reduction contributions or/and the employer made either matching or nonelective contributions.
Can you tell me if employer contributions are taxable at the state an local leval? Logic would tell me they should be as they are not reported as income on your w2 but logic does not always prevail in these matters. thanks
You are not taxed twice on the same income - on any level - federal state or local. If some income was already taxes - it never taxed again.
But it was never taxed or shown as income, employer contributions to an IRA or 401K don't show up on your W2(as far as I know) am I incorrect on this?
This if your contributions into retirement plan were not excluded from taxable income on state and local levels - that amount will not be taxed upon distribution - that is your basis. However earnings might be taxable on state level or not depending on your age.
PA DOR specifically addressed this question here - https://revenue-pa.custhelp.com/app/answers/detail/a_id/365/related/1/session/L2F2LzEvdGltZS8xMzc5NTQ0NDUxL3NpZC82dFF4S0ZBbA%3D%3D
How do I determine if my IRA withdrawals are subject to PA income tax?
Distributions from an IRA are not taxable if the payments are:
You are welcome. So as we see - the same amount i snot taxed twice on any level and you might be taxed ONLY on amounts that previously were not taxed.