Revenue Memorandum Circular No. 91-2026 clarifies the base amount used to calculate the twenty percent (20%) penalty imposed on early withdrawals from Personal Equity and Retirement Account (PERA) holdings that are classified as unqualified. The circular also amends certain provisions of Revenue Memorandum Circular No. 4-2023 to ensure consistent application of the penalty across all PERA sub‑accounts. The guidance provides clarity for trustees, plan administrators, and taxpayers on how the penalty base is determined, thereby reducing disputes and erroneous assessments.
Key Takeaways
- Penalty Base Definition: The base amount for the 20% penalty is the total fair market value of the unqualified PERA assets at the time of withdrawal, excluding any non‑taxable contributions.
- Amendment to RMC 4-2023: Specific clauses in the earlier circular are revised to reflect the new base‑amount calculation, eliminating conflicting interpretations.
- Compliance Impact: PERA administrators must now update their systems to apply the clarified base amount, ensuring accurate penalty reporting and avoidance of under‑ or over‑assessment.
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
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