Early distribution - separated from service question.

Taxpayer withdraws money from an old 401k plan (not managed by the company he last worked for) after the year he turned 55. Does the exception apply?

The taxpayer must have separated from service from the employer with the 401K in or after the year he turned 55. From what you post, I'm guessing this TP had left the employer with the 401K from which he took the distribution well before the year he turned 55. If so, no, he does not qualify for the penalty exception on this distribution.

Thanks Dog!