Early distributions Personal income types
Early withdrawal from retirement plans
Generally, early distributions from a retirement account are income and you must report it on your return.
If you take funds out of a retirement account before age 59 1/2, you may be subject to additional tax. These retirement plans can include:
- Profit-Sharing plans
Additional tax on early distributions
Generally, we impose additional taxes on early distributions with some exceptions. Visit Instructions for Form FTB 3805P for more information.
- 6% for distributions made from Savings Incentive Match Plans for Employees (SIMPLE) plans within the first 2 years of participation
- 25% for distributions made from SIMPLE plans within the first 2 years of participation
How to report
Report your early distribution on your U.S. Individual Income Tax Return (IRS Form 1040) and attach Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts (IRS Form 5329).
Any early distribution will be included in your federal AGI, which you report on your California return. Attach Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (FTB 3805P) with your return