Every Exception to the 10% Early Withdrawal Penalty, and Whether It Covers Your IRA or Your 401(k)

By Eli Wright Published July 29, 2026 Reviewed July 31, 2026 9 min read

Educational information, not financial advice. How we research and review.

Taking money out of a retirement account before age 59 and a half usually triggers a 10 percent additional tax on top of the ordinary income tax. There is a list of exceptions. The part that catches people is that the list is not the same for an IRA as it is for a 401(k), and the exception someone has read about often turns out to be the one their account type does not get.

This page is that list, as a single matrix, with the account-type column filled in for every row.

How to read this

IRA means a traditional or Roth IRA, including SEP and SIMPLE IRAs unless noted.
Workplace plan means a qualified employer plan such as a 401(k) or 403(b).
Yes in both columns means the exception exists for either account type.
n/a is not the same as No. It means the concept does not apply to that account type at all, rather than applying and being unavailable.
The 10 percent additional tax is separate from ordinary income tax. An exception removes the 10 percent. It does not make the distribution tax free.

Two things to check before you read the table

Either one can mean the table does not apply to you at all, and neither is visible from a summary of the exceptions.

A governmental section 457(b) deferred compensation plan is generally not a qualified retirement plan for this purpose. Distributions from one are not subject to the 10 percent additional tax at all. The exception to the exception: amounts attributable to a direct transfer or rollover into it from a qualified plan or an IRA. Stated on Topic no. 558 and repeated in the exceptions table’s footnote.
A SIMPLE IRA distribution taken within the first 2 years of participation carries a 25 percent additional tax, not 10 percent. Carried in the exceptions table’s footnote. Every row below is about the 10 percent tax, so this changes the number the whole page is about.

The matrix

Exception	IRA	Workplace plan	Notes, limits and code section	Confirmed on
Reaching age 59 and a half	Yes	Yes	The baseline. Everything below is an exception to taking money out before this age. Section 72(t)(2)(A)(i)	Retirement topics: exceptions
Death of the account owner	Yes	Yes	Paid to a beneficiary or estate	Retirement topics: exceptions
Total and permanent disability	Yes	Yes	The definition is specific; see the cited page	Retirement topics: exceptions
Series of substantially equal periodic payments (SEPP, “72(t)”)	Yes	Yes	Must continue for a set period, and modifying early can apply the tax retroactively. For a qualified plan other than an IRA you must separate from service with that employer before the payments begin. Topic 557 points to Notice 2022-6 for the permitted payment methods	Retirement topics: exceptions, Topic no. 557, Topic no. 558
Unreimbursed medical expenses	Yes	Yes	Only the amount above a percentage-of-AGI floor, which applies whether or not you itemize deductions. The cited page carries the current floor	Retirement topics: exceptions, Topic no. 558
Health insurance premiums while unemployed	Yes	No	IRA only, and a common misreading. Topic 557 extends it to someone who would have been eligible for unemployment compensation but for being self-employed. The exceptions table adds 12 weeks of unemployment and receipt of unemployment compensation in the year of the distribution or the following one	Retirement topics: exceptions, Topic no. 557
Qualified higher education expenses	Yes	No	IRA only	Retirement topics: exceptions
First-time home purchase	Yes	No	IRA only, and a lifetime limit applies. See the cited page for the amount	Retirement topics: exceptions
Separation from service in or after the year you turn 55 (“rule of 55”)	No	Yes	Workplace plan only. The exceptions table shows no in the IRA column, so money rolled into an IRA no longer has this exception. That consequence is read off the table rather than stated in IRS prose	Retirement topics: exceptions
Qualified public safety employees separating from service	No	Yes	Separation during or after the year the employee reaches age 50, or 25 years of service under the plan, whichever is earlier, from a governmental plan. The exceptions table’s footnote extends it to specified federal law enforcement officers, corrections officers, customs and border protection officers, federal firefighters, private-sector firefighters and air traffic controllers, and to the Thrift Savings Plan	Retirement topics: exceptions, Topic no. 558
Firefighters separating from service	n/a	Yes	Separation in or after the year they reach age 50, or 25 years of service, whichever is earlier, from plans described in clauses (iii), (iv) or (vi) of section 402(c)(8)(B). Topic 558 carries this as a bullet separate from the public safety row above	Topic no. 558
Distribution under a qualified domestic relations order (QDRO)	No	Yes	Workplace plan only. Topic 558 narrows it to an alternate payee who is the spouse or former spouse of the participant; the exceptions table says only alternate payee. The narrower wording is used here. An IRA split in divorce uses different rules	Retirement topics: exceptions, Topic no. 558
IRS levy on the account	Yes	Yes	The levy itself, not a voluntary withdrawal to pay a tax bill	Retirement topics: exceptions
Qualified reservist distribution	Yes	Yes	Called to active duty for a required period	Retirement topics: exceptions
Qualified birth or adoption distribution	Yes	Yes	A per-child limit applies and repayment may be permitted. Topic 558 specifies the plan side is a defined contribution plan	Retirement topics: exceptions, Topic no. 558
Qualified disaster recovery distribution	Yes	Yes	Requires a federally declared disaster and a defined window	Retirement topics: exceptions
Terminally ill individual distribution	Yes	Yes	Requires physician certification meeting a statutory definition. The IRS pages disagree here. Topic 557 lists it as an IRA exception and Topic 558 lists it for plans, but the exceptions table shows qualified plans yes and IRA n/a, citing section 401(k)(2)(B)(i)(I). Read 31 July 2026. This page does not resolve the conflict: a reader relying on the IRA side should confirm with a tax professional	Topic no. 557, Topic no. 558
Emergency personal expense distribution	Yes	Yes	Frequency and amount limits apply; see the cited page	Retirement topics: exceptions
Domestic abuse victim distribution	Yes	Yes	A limit applies. Confirmed for distributions made after 12/31/2023. Whether a particular plan offers it is not stated on any page read here, so confirm with your plan administrator	Retirement topics: exceptions, Topic no. 557, Topic no. 558
Corrective distribution of excess contributions	n/a	Yes	Plan side only: excess contributions, excess aggregate contributions and excess deferrals, and the earnings on them, distributed timely. Sections 401(k)(8)(D), 401(m)(7)(A), 402(g)(2)(C)	Retirement topics: exceptions
Returned IRA contribution	Yes	n/a	IRA side only: a contribution withdrawn by the extended due date of the return. Earnings on the returned contribution are not covered, which is the opposite of the plan row above and is the trap on this pair. Section 408(d)(4)	Retirement topics: exceptions, Topic no. 557
Automatic enrollment permissive withdrawal	Yes, SIMPLE IRA and SARSEP only	Yes	Section 414(w)(1)(B)	Retirement topics: exceptions, Topic no. 557, Topic no. 558
Pension-linked emergency savings account distribution	n/a	Yes	Applies to distributions made after 12/31/2023. Section 402A(e)(7)	Retirement topics: exceptions, Topic no. 558
Pre-1986 written election	n/a	Yes	A distribution from an employer plan under a written election providing a specific schedule for distribution of your entire interest, where as of 1 March 1986 you had separated from service and had begun receiving payments under the election. Carried only by Topic 558	Topic no. 558
Rollover completed within the allowed window	Yes	Yes	Not an exception exactly: a completed rollover is not a taxable distribution. A 60 day window applies, in-plan Roth rollovers are included, and Topic 557 adds the one IRA-to-IRA rollover per year rule	Retirement topics: exceptions, Topic no. 557
Amounts excepted by federal legislation on certain emergencies and disasters	Yes	Not stated on the pages read; confirm with a tax professional	A catch-all carried by Topic 557 on the IRA side. The plan side was not covered by the pages read	Topic no. 557
ESOP dividends	No	Yes	Dividends paid on employer securities held in an ESOP	Retirement topics: exceptions
Phased retirement annuity payments	No	Yes	Certain federal phased retirement arrangements. Topic 558 points to Publication 721 for detail	Topic no. 558

Reporting, in both directions. If a distribution meets an exception but box 7 of Form 1099-R does not show one, the exception is claimed on Form 5329. The reverse is the more useful half and is easier to miss: you do not need to file Form 5329 when the distribution is subject to the tax and distribution code 1 appears in box 7. In that case you enter the tax on Schedule 2 (Form 1040) and tick the box indicating you are not required to file Form 5329. Confirmed on the exceptions table, Topic no. 557 and Topic no. 558.

Hardship is not an exception. A 401(k) hardship distribution lets you take money out. It does not remove the 10 percent additional tax. The IRS hardship distributions page states that hardship distributions are subject to income taxes and may also be subject to the 10 percent additional tax on early distributions. That distinction costs people real money and is the single most common error on this topic.

Show your work: what was read, when, and what is deliberately absent

Verified 31 July 2026. Every row above was checked against the page named in its last column, read directly in a browser. The four pages read were:

Publication 590-B and Publication 575 were not opened, so neither is cited. An earlier draft of this page cited Publication 590-B on several rows; those rows have been re-cited to the pages that were actually read.

Why the account-type split is the contribution. The exceptions table is the only one of the four that carries both account types in one grid. Topic no. 557 covers IRAs and Topic no. 558 covers plans other than IRAs, so a reader on either of those pages sees one column and cannot tell what the other says. Putting them side by side is what this page adds, and it is also what surfaced the terminal illness disagreement.

No dollar threshold, percentage-of-AGI floor or contribution limit appears in the table. That is a rule, not an oversight: those figures change, and a stale number on a tax page is a real harm. Each such cell points at the page carrying the current value. The percentages and periods that do appear, the 10 and 25 percent taxes, the 2 year SIMPLE IRA window, the 60 day rollover window, the age and service tests and the statutory dates, were each read on the pages above.

Revalidation cadence: quarterly, and every January. The 10 percent penalty exception list is the part of the code Congress keeps amending, and SECURE 2.0 provisions are still phasing in, so a verification stamp ages badly. This page is re-verified against the four pages above every three months, and again each January when annual changes land. scripts/test_ad_safety.py fails the build once the stamp passes its due date, so an expired page cannot sit in the index unnoticed: it is either re-verified or pulled back out.

This is general information, not tax advice. Whether an exception applies to a specific distribution depends on facts this page cannot see. Confirm with a tax professional before acting.

The inputs above are fixed so the arithmetic can be checked. To run it on your own figures, use the retirement calculator.

What this table does not tell you

Three things it deliberately leaves out, because getting them wrong is worse than not stating them:

Dollar limits and percentage floors. Several rows carry a cap or a threshold that changes. Rather than print a figure that could be a year out of date, each row points to the IRS page that carries the current one.
Whether your specific plan offers it. Several of the newer exceptions are optional for employers. The exception can exist in law and still be unavailable in your plan. Your plan administrator, not the IRS page, answers that.
Your state. State tax treatment of an early distribution is separate and is not covered here.
Which of two IRS pages is right about terminal illness. They disagree, the disagreement is printed in that row, and resolving it is beyond what a reader-facing page should attempt.

Where people get caught

Rolling a 401(k) into an IRA and then relying on the rule of 55. The rule of 55 is a workplace-plan exception. Once the money is in an IRA, it is gone.
Assuming education or first-home exceptions apply to a 401(k). They are IRA-only rows in the table above.
Treating a hardship withdrawal as penalty-free. Access and penalty relief are two different questions.
Modifying a SEPP schedule early. Stopping or changing the payments before the required period can apply the 10 percent retroactively to earlier payments.