No, divorce is not a reason to avoid the penalty for early withdrawal of an IRA.
The U.S. government charges a 10% penalty on early withdrawals from a Traditional IRA, and a state tax penalty may also apply. You may be able to avoid a penalty if your withdrawal is for:
First-time home purchase
Some types of home purchases are eligible. Funds must be used within 120 days, and there is a pre-tax lifetime limit of $10,000.
Educational expenses
Some educational expenses for yourself and your immediate family are eligible.
Disability or death
If you’re disabled, you can withdraw IRA funds without penalty. If you pass away, there are no withdrawal penalties for your beneficiaries.
Medical expenses
You can avoid an early withdrawal penalty if you use the funds to pay unreimbursed medical expenses that are more than 7.5% of your adjusted gross income (AGI).
Health insurance
If you’re unemployed for at least 12 weeks, you may withdraw funds to pay health insurance premiums for yourself, your spouse, or your dependents.
Periodic payments
You can avoid an early withdrawal penalty if you choose to receive your funds on a regular distribution schedule.1
Involuntary distribution
If a distribution is the result of an IRS tax levy, IRS Form 5329 explains how to claim your penalty exception.
Reservist distributions Members of the National Guard and reservists can take penalty-free distributions if they are called to active duty for at least 180 days. Some restrictions apply.
