Early withdrawal from 401k (before 59.5): I am retired over 55 but under 59.5 & taking Periodic withdrawals from 401k. My understanding is PA doesn't tax withdrawals until your withdrawal is greater than your overall contributions to the plan (Cost Recovery Method).
I called the custodian to get the total contributions over the life of the plan so I can figure my tax liability for PIT, but they said they only have it listed as contribution w/earnings & agent doesn't think any of the systematic withdrawals are tax exempt for PA Income Tax purposes. My interpretation from the PA DEPT OF REV. site is withdrawals are tax-exempt up to the total of my contributions if taken before 59.5 & totally tax-exempt after 59.5. Agent said there is no way to separate earning from contributions so doesn't see how this can be so.
Am I correct in my assumption? If so, how can I go about getting total contributions & prior withdrawals without searching 20 something yrs. of statements & tax returns. I can get up to 18 months online, but not back 20 yrs. Shouldn't the custodian be able to retrieve that info. or is it my responsibility to keep such records.
Main issue: Withdrawals tax-free up to amount of contribution (PIT doesn't care whether part of withdrawal is earning or not) It's just the total contributions (over 20+ yrs) -minus the total withdrawal - correct??
If I haven't recovered all my contribution by 59.5 all withdrawals after that point are tax-free for PIT purposes.