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Part I—Additional Tax

Distributions from a designated Roth

you had a frozen deposit. See Pub. 590

for details.

account. If you received an early

on Early Distributions

distribution from your designated Roth

In-plan Roth rollover. If you are a

account, include on line 1 the amount

In general, if you receive an early

participant in a 401(k), 403(b), or

of the distribution that you must include

distribution (including an involuntary

governmental 457(b) plan, your plan

in your income. You will find this

cashout) from an IRA, other qualified

may now permit you to roll over

amount in box 2a of your 2011 Form

retirement plan, or modified endowment

amounts from those plans to a

1099-R. If you made an in-plan Roth

contract, the part of the distribution

designated Roth account within the

rollover in 2010 or 2011, you may also

included in income generally is subject

same plan. The rollover of any untaxed

need to include a recapture amount on

to an additional 10% tax. But see

amounts must be included in income.

line 1 (discussed next).

Distributions from a designated Roth

Generally, the 10% tax on early

account and Distributions from Roth

If you did not make an in-plan

distributions does not apply. For more

IRAs, later.

Roth rollover in 2010 or 2011,

TIP

information, see Pub. 575.

you only need to include on line

The additional tax on early

1 of this form the amount from box 2a

Compensation. Compensation

distributions does not apply to any of

of the 2011 Form 1099-R reporting the

includes wages, salaries, tips, bonuses,

the following:

early distribution.

•

and other pay you receive for services

A qualified HSA funding distribution

you perform. It also includes sales

Recapture amount subject to the

from an IRA (other than a SEP or

commissions, commissions on

additional tax on early distributions.

SIMPLE IRA). See Pub. 969 for details.

insurance premiums, and pay based on

•

If you made an in-plan Roth rollover in

A distribution from a traditional or

a percentage of profits. It includes net

2010 or 2011 and you received an early

SIMPLE IRA that was converted to a

earnings from self-employment, but

distribution for 2011, the recapture

Roth IRA.

only for a trade or business in which

•

amount to include on line 1 is a portion

A rollover from a qualified retirement

your personal services are a material

of amounts you rolled over in 2010 and

plan to a Roth IRA.

income-producing factor.

•

2011.

In-plan rollover to a designated Roth

account.

The recapture amount that you must

For IRAs, treat nontaxable combat

•

A distribution of certain excess IRA

include on line 1 will not exceed the

pay and any differential wage

contributions (see the instructions for

amount of your early distribution; and,

payments, and all taxable alimony

line 15, later, and the instructions for

for purposes of determining this

received under a decree of divorce or

line 23, later).

recapture amount, a rollover amount (or

separate maintenance as

portion of a rollover) will only be

compensation.

Note. Any related earnings withdrawn

allocated to an early distribution once.

with excess contributions are subject to

Compensation does not include any

For more information about the

the additional tax on early distributions

amounts received as a pension or

recapture amount for distributions from

if you were under age 59

at the time

annuity and does not include any

a designated Roth account, including

of the distribution.

amount received as deferred

how to calculate it, see Pub. 575.

•

A distribution of excess contributions

compensation.

Distributions from Roth IRAs. If you

from a qualified cash or deferred

received an early distribution from your

arrangement.

Taxable compensation is your

•

Roth IRAs, include on line 1 the part of

A distribution of excess aggregate

compensation that is included in gross

the distribution that you must include in

contributions to meet nondiscrimination

income reduced by any deductions on

your income. You will find this amount

requirements for employee

Form 1040 or Form 1040NR, lines 27

on line 25 of your 2011 Form 8606. You

contributions and matching employer

and 28, but not by any loss from

will also need to include on line 1 the

contributions.

self-employment.

•

following amounts.

A distribution of excess deferrals.

•

A qualified first-time homebuyer

A distribution from an eligible

Additional Information

distribution from line 20 of your 2011

governmental section 457 deferred

Form 8606. Also include this amount on

compensation plan to the extent the

See Pub. 590, Individual Retirement

line 2 and enter exception number 09.

distribution is not attributable to an

Arrangements; Pub. 560, Retirement

•

Recapture amounts attributable to

amount transferred from a qualified

Plans for Small Business; Pub. 575,

any conversions or rollovers to your

retirement plan (excluding an eligible

Pension and Annuity Income; Pub. 969,

Roth IRAs in 2007, 2008, 2009, 2010,

section 457 deferred compensation

Health Savings Accounts and Other

or 2011. See Recapture amount subject

plan).

Tax-Favored Health Plans; Pub. 970,

to the additional tax on early

Tax Benefits for Education; and Pub.

See the instructions for line 2, later,

distributions below.

4492-B, Information for Affected

for other distributions that are not

Taxpayers in the Midwestern Disaster

If you did not convert or roll over

subject to the tax.

an amount to your Roth IRAs in

Areas.

TIP

2007 through 2011, or have a

Line 1

first-time homebuyer distribution, you

Enter the amount of early distributions

only need to include the amount from

Specific Instructions

included in income that you received

line 25 of your 2011 Form 8606 on line

from:

1 of this form.

•

Joint returns. If both you and your

A qualified retirement plan, including

Recapture amount subject to the

spouse are required to file Form 5329,

earnings on withdrawn excess

additional tax on early distributions.

complete a separate form for each of

contributions to your IRAs included in

If you converted or rolled over an

you. Include the combined tax on Form

income in 2011, or

amount to your Roth IRAs in 2007,

•

1040, line 58.

A modified endowment contract

2008, 2009, 2010, or 2011 and you

entered into after June 20, 1988.

received an early distribution for 2011,

Amended returns. If you are filing an

the recapture amount to include on line

amended 2011 Form 5329, check the

Certain prohibited transactions, such

1 is the amount, if any, of the early

box at the top of page 1 of the form. Do

as borrowing from your IRA or pledging

distribution allocated to the taxable

not use the 2011 Form 5329 to amend

your IRA assets as security for a loan,

portion of your 2007 through 2011

your return for any other year. For

are considered to be distributions and

conversions or rollovers.

information about amending a Form

may also cause you to owe the

5329 for a prior year, see Prior tax

additional tax on early distributions. See

Generally, an early distribution is

years, earlier.

Pub. 590 for details.

allocated to your Roth IRA contributions

-2-

Instructions for Form 5329 (2011)

Instructions For Form 5329 - Additional Taxes On Qualified Plans And Other Tax-Favored Accounts - 2011 Page 2

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