Are there exceptions to the early distribution penalty on an IRA?
Unless you qualify for an exception, you’ll pay a 10% additional tax penalty on the taxable amount of early distributions from an IRA (traditional or Roth) before reaching age 59 1/2.
There are exceptions to the 10% tax penalty for early distributions:
- Death, or total and permanent disability
- Series of substantially equal periodic payments based on life expectancy
- Qualified first-time homebuyer distributions up to $10,000
- Qualified higher education expenses
- Certain medical insurance premiums paid while unemployed
- Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
- IRS levy
- Certain distributions to qualified military reservists called to active duty
Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax.