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Tax Breaks for Reservists Called to Active Duty
Penalty-free withdrawals allowed from retirement plans

If you are a reservist or national guardsman who was ordered or called to active duty for a period in excess of 179 days, you may withdraw money from your qualified retirement plan or IRA without incurring the 10% premature distribution penalty.

You must have taken the distribution during your active duty status. This new rule applies to any distribution made to you after September 11, 2001 and before December 31, 2007.

If you received a distribution from your retirement plan or IRA during the period you were on active duty, you have the option to repay that distribution within two years from the date your active duty ends or August 17, 2008, whichever is later.


 

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