Taxpayer took 2 early distributions of retirement, 1 while living in CA, 1 while living in FL, all in 2009. The 401K is from a CA job. Does he have to pay additional tax on 100%? Or just the CA portion?
Unless he turned 59 1/2 on the way to Florida, then yes the penalty applies to both distributions. It is the IRS charging the penalty not FL or CA.
Thank you for your prompt response! But I realize I wasn't clear on my question.
I know the taxpayer will be responsible for penalty on 100% by the IRS. But California also adds an additional 2 1/2% additional tax. I assume this should only be charged to the portion taken while living in California, correct?
Yes I believe you are correct (No CA penalty on FL dist.), although I have heard rumors CA likes to tax just about all earnings. But part year resident status should do trick.
Thanks again for the prompt response and thanks for the help!
