Details of Public Law 117-328, section 323 , Clarification of Substantially Equal Periodic Payment Rule

The provision allows transfers, rollovers, or distributions from a qualified retirement plan or annuity contract to another qualified retirement plan or annuity contract that are made in equal periodic payments to be exempt from the 10 percent additional tax on early distributions.

Information reporting requirement penalties for failure to file correct information returns and failure to furnish correct payee statements would not be imposed under the following rules:

if a person makes a return or report regarding the distribution for an annuity plan or retirement plan,

for the distribution made following a rollover, transfer, or exchange that is exempt from the additional tax on early distributions,

in making the return or report, the person relies on the certification provided by the taxpayer that the distribution met the early withdrawal exception and exchange requirements, and

the person does not have knowledge that the distributions do not satisfy those requirements.

California conforms to IRC section 72(t), additional tax on early distributions from qualified plans tax as applicable for federal purposes for the same taxable year using a rate of 2 ½ percent in lieu of the federal tax rate. (RTC section 17085(c)(1).) The equal periodic payment rule for early distributions would not be subject to a California early withdrawal tax if they are not subject to the federal additional tax on early distributions.

California generally conforms to IRC section 6724 for reasonable cause waiver, definition, and special rules, as of 1/1/2015 with modifications, but does not conform to the modifications made under this section.