Note: This form is planned for a future release and is not yet available in PaisaTax. The information below is for educational reference only.
What is Form 5329?
Form 5329 calculates additional taxes on early distributions from qualified retirement plans, IRAs, and other tax-favored accounts. The most common is the 10% early distribution penalty on 1099-R distributions with Code 1 (early, no exception). Separate parts handle different account types and situations, including excess contributions and missed required minimum distributions.
SupportedKey Lines
| Part | Description | Destination |
|---|---|---|
| Part I | Early distributions from qualified plans (10%) | Schedule 2 Line 8 |
| Part II | Early distributions from employer plans | Schedule 2 Line 8 |
| Part III | Excess contributions to traditional IRAs | Schedule 2 Line 8 |
| Part IV | Excess contributions to Roth IRAs | Schedule 2 Line 8 |
| Part VII | Excess HSA contributions (from Form 8889) | Schedule 2 Line 8 |
How PaisaTax Handles It
- Triggered by 1099-R distributions with early distribution codes
- Exception codes (e.g., disability, SEPP, first-time home) can eliminate the penalty
- HSA penalty flows from Form 8889 non-qualified distributions at 20%
- All parts aggregate to Schedule 2 Line 8, then Form 1040 Line 24
Common Situations
- Early 401(k) withdrawal: 1099-R with Code 1 — 10% penalty on the taxable amount in Part I.
- Exception applies: Disability distribution (Code 3) — reported on Form 5329 but penalty is zero.
- Non-qualified HSA distribution: 20% penalty from Form 8889 flows to Part VII.