Distributions from 403(b) Plans

The permissible circumstances for distributions from a 403(b) plan are:

  • Reaching the age of 59½,
  • Severance from employment,
  • Death,
  • Disability,
  • Financial hardships, or
  • Qualified reservist distribution (being activated in the National Guard or Reserves)

Non-qualified distributions are taxed as ordinary income with an additional 10% tax on the distribution.

If you’d like to read more on 403(b) plans, the following IRS publications are a great source of information.

IRS Publication 571

IRS Publication 575

 


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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