When a taxpayer under age 59-1/2 takes a distribution from a qualified retirement plan, a 10% penalty is generally imposed. However, exceptions may apply. In one case, a taxpayer argued that her gambling addiction qualified her for an exception due to disability. The gambling addiction arose, she said, from an addiction to medication, which led to compulsive behavior and then to financial problems. A U.S. Tax Court rejected her claim, finding she hadn’t established that she qualified for a disability exception. (TC Memo 2018-195)

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