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to an amount transferred from a

1040NR, line 27, but not by any loss

A distribution of excess deferrals.

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qualified retirement plan (defined on

from self-employment.

A distribution from an eligible

page 1).

governmental section 457 deferred

Additional Information

compensation plan to the extent the

Note. Modified endowment contracts

distribution is not attributable to an

are not qualified retirement plans.

See Pub. 590; Pub. 560, Retirement

amount transferred from a qualified

Plans for Small Business; Pub. 575;

Traditional IRAs. For purposes of

retirement plan (excluding an eligible

Pub. 969, Health Savings Accounts and

Form 5329, a traditional IRA is any IRA,

section 457 deferred compensation

Other Tax-Favored Health Plans; Pub.

including a simplified employee pension

plan).

970, Tax Benefits for Education; Pub.

(SEP) IRA, other than a SIMPLE IRA or

See the instructions for line 2 on

4492-A; and Pub. 4492-B.

Roth IRA.

page 3 for other distributions that are

Early distribution. Generally, any

not subject to the tax.

distribution from your IRA, other

Specific Instructions

Line 1

qualified retirement plan, or modified

endowment contract before you reach

Enter the amount of early distributions

Joint returns. If both you and your

age 59

is an early distribution.

included in income that you received

spouse are required to file Form 5329,

Rollover. Generally, a rollover is a

from:

complete a separate form for each of

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tax-free distribution of assets from one

A qualified retirement plan, including

you. Include the combined tax on Form

qualified retirement plan that is

earnings on withdrawn excess

1040, line 59.

reinvested in another plan or the same

contributions to your IRAs included in

Amended returns. If you are filing an

plan. Generally, you must complete the

income in 2008, or

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amended 2008 Form 5329, check the

rollover within 60 days of receiving the

A modified endowment contract

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

distribution. Any taxable amount not

entered into after June 20, 1988.

not use the 2008 Form 5329 to amend

rolled over must be included in income

Certain prohibited transactions, such

your return for any other year. Instead,

and may be subject to the additional tax

as borrowing from your IRA or pledging

see Prior tax years on page 1.

on early distributions.

your IRA assets as security for a loan,

Beginning in 2008, you can roll over

are considered to be distributions and

Part I—Additional Tax

(convert) amounts from a qualified

may also cause you to owe the

retirement plan to a Roth IRA. Any

on Early Distributions

additional tax on early distributions. See

amount rolled over to a Roth IRA is

Pub. 590 for details.

In general, if you receive an early

subject to the same rules for converting

distribution (including an involuntary

Exception for Roth IRA

a traditional IRA to a Roth IRA. You

cashout) from an IRA, other qualified

Distributions

must include in your gross income

retirement plan, or modified endowment

distributions from a qualified retirement

If you received an early distribution

contract, the part of the distribution

plan that you would have had to include

from a Roth IRA, first allocate the

included in income generally is subject

in income if you had not rolled them

amount on your 2008 Form 8606, line

to an additional 10% tax. But see

into a Roth IRA. Generally, the 10% tax

19 (not including any qualified disaster

Exception for Roth IRA Distributions on

on early distributions does not apply.

recovery assistance distributions or

this page.

For more information, see Rollover

qualified recovery assistance

From Employer’s Plan Into a Roth IRA

The additional tax on early

distributions), in the order shown, to the

in chapter 2 of Pub. 590.

distributions does not apply to any of

amounts on the lines listed below (to

the following:

the extent a prior year distribution was

The IRS may waive the 60-day

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A qualified disaster recovery

not allocable to the amount).

requirement if failing to waive it would

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assistance distribution. See Form 8930

Your 2008 Form 8606, line 20.

be against equity or good conscience,

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for more details.

Your 2008 Form 8606, line 22*.

such as situations where a casualty,

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A qualified recovery assistance

Your 1998 Form 8606, line 16.

disaster, or other events beyond your

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distribution. See Pub. 4492-A for more

Your 1998 Form 8606, line 15.

reasonable control prevented you from

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details.

Your 1999 Form 8606, line 16.

meeting the 60-day requirement. Also,

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An economic stimulus payment

Your 1999 Form 8606, line 15.

the 60-day period may be extended if

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directly deposited into your IRA and

Your 2000 Form 8606, line 16.

you had a frozen deposit. See Pub. 590

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withdrawn by the due date of your tax

Your 2000 Form 8606, line 15.

for details.

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return (including extensions).

Your 2001 Form 8606, line 18.

Compensation. Compensation

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A qualified HSA funding distribution

Your 2001 Form 8606, line 17.

includes wages, salaries, tips, bonuses,

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from an IRA (other than a SEP or

Your 2002 Form 8606, line 18.

and other pay you receive for services

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SIMPLE IRA). See Pub. 969 for details.

Your 2002 Form 8606, line 17.

you perform. It also includes sales

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A distribution from a traditional or

Your 2003 Form 8606, line 18.

commissions, commissions on

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SIMPLE IRA that was converted to a

Your 2003 Form 8606, line 17.

insurance premiums, and pay based on

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Roth IRA.

Your 2004 Form 8606, line 18.

a percentage of profits. It includes net

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A rollover from a qualified retirement

Your 2004 Form 8606, line 17.

earnings from self-employment, but

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plan to a Roth IRA.

Your 2005 Form 8606, line 18.

only for a trade or business in which

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A distribution of certain excess IRA

Your 2005 Form 8606, line 17.

your personal services are a material

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contributions (see the instructions for

Your 2006 Form 8606, line 18.

income-producing factor.

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lines 15 and 23 on page 4).

Your 2006 Form 8606, line 17.

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For IRAs, treat nontaxable combat

Your 2007 Form 8606, line 18.

Note. Any related earnings withdrawn

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pay and all taxable alimony received

Your 2007 Form 8606, line 17.

with excess contributions are subject to

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under a decree of divorce or separate

Your 2008 Form 8606, line 18.

the additional tax on early distributions

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maintenance as compensation.

Your 2008 Form 8606, line 17.

if you were under age 59

at the time

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Compensation does not include any

Your 2008 Form 8606, line 25c.

of the distribution.

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amounts received as a pension or

*If applicable, reduce this amount by

A distribution of excess contributions

annuity and does not include any

any amounts attributable to qualified

from a qualified cash or deferred

amount received as deferred

disaster recovery assistance

arrangement.

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compensation.

distributions or qualified recovery

A distribution of excess aggregate

assistance distributions.

Taxable compensation is your

contributions to meet nondiscrimination

compensation that is included in gross

requirements for employee

Then, include on line 1 of Form 5329

income reduced by any deductions on

contributions and matching employer

the amount from your 2008 Form 8606,

Form 1040, lines 27 and 28, or on Form

contributions.

line 25c, plus the amount, if any,

-2-

Instructions For Form 5329 - Additional Taxes On Qualified Plans (Including Iras) And Other Tax-Favored Accounts - 2008 Page 2

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