Early withdrawal penalty exceptions: every way out of the 10 %
The 10 % additional tax has more than a dozen exceptions, but only two of them can carry an early retirement; the rest answer one event at a time.
No 10 % on this withdrawal
$0
Covered: $12,000 of $12,000 · IRC 72(t)(2)(B).
| Applies to 401(k) and 403(b) | yes |
| Applies to IRAs | yes |
| Cap | none |
| Income tax still due | yes |
Worked out by Radif Partners · How we calculate · figures read on irs.gov and healthcare.gov · not personal financial advice
Section 72(t)(2) of the tax code lists the cases in which a withdrawal before 59½ escapes the 10 % additional tax; income tax stays due in every one of them. The table on this page covers the 15 exceptions most people ask about, with the account they apply to, the cap and the code section, as published in the IRS exceptions table updated in December 2025. Only two serve a planned early retirement: the rule of 55 (separation from service in or after the year you turn 55, 50 for qualified public safety employees), which works only in an employer plan, and a 72(t) series of substantially equal payments, which works in both. The others follow a life event and many are capped: $5,000 per child for a birth or adoption, $1,000 a year for an emergency expense, $10,000 for a first home from an IRA, $22,000 after a federally declared disaster. Above a cap, the 10 % applies to the rest.
The full table, account by account
The IRS publishes one table with two columns that matter: qualified plans such as a 401(k) or 403(b), and IRAs, which include SEP, SIMPLE IRA and SARSEP accounts (IRS exceptions table). Of the exceptions below, 9 work in both; the others belong to one side only. The last column is this site's reading of what each exception is for.
| Exception | 401(k) or 403(b) | IRA | Cap | IRC section | Serves |
|---|---|---|---|---|---|
| Left the employer in or after the year you turned 55 (50, or 25 years of service, for qualified public safety employees) | yes | no | none | 72(t)(2)(A)(v), 72(t)(10) | retirement plan |
| Series of substantially equal periodic payments, 72(t) | yes | yes | none | 72(t)(2)(A)(iv) | retirement plan |
| Total and permanent disability | yes | yes | none | 72(t)(2)(A)(iii) | life event |
| Terminal illness certified by a physician | yes | in Pub. 590-B, not in the IRS table | none | 401(k)(2)(B)(i)(I) in the IRS table | life event |
| Unreimbursed medical expenses above 7.5% of AGI | yes | yes | none | 72(t)(2)(B) | life event |
| Health insurance premiums while unemployed | no | yes | none | 72(t)(2)(D) | life event |
| Qualified higher education expenses | no | yes | none | 72(t)(2)(E) | life event |
| First-time homebuyer, up to $10,000 | no | yes | $10,000 | 72(t)(2)(F) | life event |
| Birth or adoption, up to $5,000 per child | yes | yes | $5,000 | 72(t)(2)(H) | life event |
| Emergency personal expense, up to $1,000 once a year | yes | yes | $1,000 | 72(t)(2)(I) | life event |
| Victim of domestic abuse, up to $10,000 or 50% of the account | yes | yes | $10,000 | 72(t)(2)(K) | life event |
| Federally declared disaster, up to $22,000 | yes | yes | $22,000 | 72(t)(2)(M), 72(t)(11) | life event |
| Paid to an ex-spouse under a QDRO | yes | no | none | 72(t)(2)(C) | imposed by a court or the IRS |
| IRS levy of the plan or IRA | yes | yes | none | 72(t)(2)(A)(vii) | imposed by a court or the IRS |
| Qualified military reservist called to active duty | yes | yes | none | 72(t)(2)(G) | life event |
The two that can carry an early retirement
A planned retirement before 59½ needs an exception that keeps working year after year, without an event to prove. Only two do. The rule of 55 opens the plan of the employer you leave in or after the calendar year you turn 55; for qualified public safety employees the age is 50, or 25 years of service under the plan, as the public safety page details. It never applies to an IRA. A series of substantially equal periodic payments under section 72(t)(2)(A)(iv) works from an IRA at any age, and from a plan once you have left that employer, but it locks the yearly amount until the later of five years and 59½.
The difference is large. A 52-year-old couple with no other income who take $36,000 a year from an old 401(k) owe $3,600 of additional tax each year without an exception. If $36,000 is what a 72(t) series produces on the account they use, the same amount owes $0, and the income tax, about $380 on a joint return, is identical. The 72(t) calculator sizes the series, and the bridge page combines it with other accounts.
Does your situation reach this account?
No 10 % on this withdrawal
$0
| Applies to 401(k) and 403(b) | yes |
| Applies to IRAs | yes |
| Cap | none |
| Income tax still due | yes |
Life events, and where the cap bites
Most exceptions answer one event and cover a limited amount. When the withdrawal is larger than the cap, the 10 % applies only to the part above it. The engine applies the caps of the IRS table:
| Event | Withdrawal | Covered by the exception | 10 % on the rest |
|---|---|---|---|
| Birth of one child | $14,000 | $5,000 | $900 |
| Emergency personal expense | $2,500 | $1,000 | $150 |
| Federally declared disaster | $30,000 | $22,000 | $800 |
| Domestic abuse victim | $16,000 | $10,000 | $600 |
For a birth, $14,000 taken from a 401(k) leaves $9,000 exposed and $900 of additional tax; the $5,000 is per child, so twins double it. The emergency exception allows one distribution per calendar year, up to the lesser of $1,000 or the vested balance above $1,000, so $2,500 leaves $150 to pay. After a federally declared disaster where you live, $22,000 is covered for qualified individuals who suffer an economic loss; on $30,000 the rest owes $800. The domestic abuse exception covers the lesser of $10,000 or half the account.
Three exceptions have conditions rather than caps. Disability means, in the words of Publication 575, that you cannot do any substantial gainful activity because of a physical or mental condition that a physician determines can be expected to result in death or to be of long, continued or indefinite duration (Publication 575). Terminal illness requires a physician's certification that the condition can reasonably be expected to result in death within 84 months, with the content the publication lists. Medical expenses are covered only to the extent they exceed 7.5 % of adjusted gross income, whether or not you itemize; the calculator above treats the whole amount you enter as qualifying, so enter only the part above that floor.
Exceptions outside the table
The IRS list is longer than the table above, which keeps the cases people meet in practice. Reaching 59½ ends the additional tax. Distributions after the death of the owner are exempt. A rollover to another plan or IRA within 60 days is not a taxable distribution at all. Corrective distributions of excess contributions, dividends passed through from an employee stock ownership plan (ESOP), IRA contributions returned by the extended due date of the return, permissive withdrawals from a plan with automatic enrollment, and distributions from a pension-linked emergency savings account are also listed. Publication 575 adds phased retirement annuity payments to federal employees. A governmental 457(b) sits apart: its distributions carry no 10 % at all, except amounts rolled in from another type of plan or an IRA (IRS Topic 558).
Claiming an exception
The plan or custodian reports each payout on Form 1099-R with a code in box 7. When it does not show an exception that applies to you, because the payer could not know about your medical bills or your new child, the IRS says to use Form 5329 to indicate the correct exception. Keep the proof that matches the exception: a certification, a birth certificate, invoices, a disaster declaration. The 401(k) penalty page and the IRA penalty page show what a withdrawal costs when no exception applies.