Qualified Reservist

AAA

DEFINITION of 'Qualified Reservist '

A member of the military reserve who is not actively serving but may be called to duty and who is eligible to make an early withdrawal from his/her individual retirement account (IRA) without incurring the usual early distribution penalty. Under most circumstances, the IRS imposes a penalty of 10% on the taxable amount withdrawn from a retirement account by a taxpayer younger than 59.5 years old.

INVESTOPEDIA EXPLAINS 'Qualified Reservist '

To qualify for this exception, the reservist must be called to active duty for more than 179 days and the withdrawal must occur while the reservist is serving on active duty. These early withdrawals may still be subject to state and federal taxes.



RELATED TERMS
  1. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  2. Roth IRA

    An individual retirement plan that bears many similarities to ...
  3. Distribution

    1. When trading volume is higher than that of the previous day ...
  4. Pension Protection Act Of 2006 ...

    An act of legislation that makes a large number of reforms to ...
  5. Premature Distribution

    Any distribution taken from an IRA, qualified plan or tax-deferred ...
  6. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
Related Articles
  1. Tax Treatment Of Roth IRA Distributions
    Taxes

    Tax Treatment Of Roth IRA Distributions

  2. Managing Income During Retirement
    Budgeting

    Managing Income During Retirement

  3. 9 Penalty-Free IRA Withdrawals
    Taxes

    9 Penalty-Free IRA Withdrawals

  4. Avoiding IRS Penalties On Your IRA Assets
    Taxes

    Avoiding IRS Penalties On Your IRA Assets

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center