You take the exception on your tax return. Distributions made to a terminally ill employee, on or after the date the employee has been certified by a physician as having a terminal illness, qualify for an exception to the early withdrawal penalty. If you qualify, enter the exception and keep the certification with your tax records. You don't need to attach it.
You have a permanent and total disability if you can't engage in any substantial gainful activity because of your physical or mental condition. A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. See Physician's statement, later.
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