Ed Slott's mailbag: hospice client, 52, can qualify for IRA penalty exception
A physician certification that the illness is reasonably expected to result in death within 84 months is required.
At a glance
To qualify, the client must obtain a physician certification that describes the illness and states it is reasonably expected to result in death within 84 months, or seven years.
Separately, IRAHelp answered a question about whether an IRA owner inside the 60-day window can pay back multiple distributions received at different times within those 60 days.
A 52-year-old client entering hospice for cancer can qualify to withdraw from his IRA before 59½ without the 10% early-withdrawal penalty, Ed Slott's IRAHelp says in its weekly Slott Report Mailbag.
The exception was created by SECURE 2.0 for pre-59½ IRA withdrawals in cases of terminal illness, and the advisor posing the question had the provision right, IRAHelp says.
To qualify, the client must obtain a physician certification that describes the illness and states it is reasonably expected to result in death within 84 months, or seven years. That certification must then be provided to the IRA custodian.
Separately, IRAHelp answered a question about whether an IRA owner inside the 60-day window can pay back multiple distributions received at different times within those 60 days. No. Under the once-per-year rollover rule, receiving multiple distributions within any 12-month period permits a 60-day rollover of only one of them. The limit applies to traditional IRA-to-traditional IRA rollovers and Roth IRA-to-Roth IRA rollovers, and violating it could result in taxes and penalties.
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