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definition of “qualified retirement plans” (to which section
72(t) literally applies) the referenced section 4974(c) includes,
among other things, employee annuity accounts established by
section 501(c)(3) organizations.
Excepted from the above section 72(t) 10-percent additional
tax on early distributions are certain distributions relating to
medical expenses and health insurance premiums. See sec.
72(t)(2)(B). The section 72(t) 10-percent additional tax will
not apply to the extent that the early distributions are equal in
amount to unreimbursed medical expenses including health
insurance premiums which the employees who received the
distributions paid during the year and to the extent that the
medical expenses including health insurance premiums would be
allowable as tax deductions under section 213. Id.
The language of section 72(t)(2)(B) provides as
follows:
Medical expenses. Distributions made to the employee
* * * to the extent such distributions do not exceed the
amount allowable as a deduction under section 213 to the
employee for amounts paid during the taxable year for
medical care (determined without regard to whether the
employee itemizes deductions for such taxable year).
Although in 2001 petitioner’s law partnership paid a total
of $3,209 in health insurance premiums, because petitioner
claimed $1,925 thereof as an ordinary deduction, under section
162(l) only the $1,284 balance of the health insurance premiums
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Last modified: May 25, 2011