Reviewed September 2026.
Taking money from a traditional IRA before age 59½ often triggers ordinary income tax plus a 10% additional tax (penalty) unless an IRS exception applies. Roth IRAs treat contributions differently from earnings (Roth 5-year rule, Roth vs traditional IRA taxes). This page lists common statutory IRA exceptions. It is not about CD early withdrawal penalties and not the same as a workplace 401(k) “hardship” menu (401(k) loan vs hardship).
Rules and dollar caps change. Confirm current IRS guidance (Publication 590-B and Form 5329 instructions) before you withdraw.
First split: tax vs penalty vs Roth basis
| Account piece | Typical tax | Typical 10% penalty before 59½ |
|---|---|---|
| Traditional IRA taxable distribution | Ordinary income | Yes, unless an exception applies |
| Roth IRA contributions (basis) | Usually none | Usually none for returned contributions |
| Roth IRA earnings (non-qualified) | Often taxable | Often yes, unless an exception applies |
| Excess contribution removal | Special timing rules | See excess contribution removal |
Paying income tax is separate from owing the 10% additional tax. An exception can waive the penalty while tax still applies.
Common IRS exceptions (high-level)
Use this as a map, not a filing opinion. Many exceptions have documentation tests.
- Age 59½ (the baseline rule, not an “exception” so much as the ordinary gate).
- Death of the IRA owner (beneficiaries follow inherited-IRA rules).
- Total and permanent disability as defined by IRS standards.
- Substantially equal periodic payments (SEPP / 72(t)): a series of payments calculated under IRS-approved methods; modifying the series early can claw back penalties.
- Unreimbursed medical expenses above the AGI threshold in effect for the year (commonly 7.5% of AGI in recent years; confirm current %).
- Health insurance premiums while unemployed after you lost a job, when IRS unemployment and timing conditions are met.
- Qualified higher education expenses for you, your spouse, or a child or grandchild of either (IRS relationship rules, dependency status alone does not define the exception; tuition and related costs defined by IRS).
- First-time homebuyer distribution up to a $10,000 lifetime cap (IRS “first-time” definition can include people who have not owned a home in the prior two years).
- IRS levy on the IRA.
- Qualified reservist distributions when military call-up rules are met.
- Qualified birth or adoption distributions up to $5,000 per birth/adoption (with possible recontribution rules).
- SECURE 2.0-era items that may apply when statutes and IRS guidance allow them, such as limited emergency personal expense withdrawals, domestic abuse victim distributions, and certain terminal illness distributions. Caps, definitions, and recontribution windows are statute-specific; verify before you rely on them.
- Qualified disaster recovery distributions when a federal disaster declaration and IRS guidance cover your case.
Workplace hardship categories do not automatically carry over to IRAs. If your dollars are still in a 401(k), read that plan’s rules separately.
SEPP (72(t)) in plain terms
A SEPP lets you take a fixed series of IRA payments before 59½ without the 10% penalty, if you follow an IRS-approved calculation method and do not break the series until the later of five years or age 59½ (special rules apply). Mistakes (extra withdrawal, stopping early) can make prior penalties come due with interest. This is a long commitment, not a one-time ATM.
Worked example: education exception vs card debt
Jordan is 45 with a $40,000 traditional IRA and a $9,000 tuition bill for Jordan’s child. Jordan also has a 22% APR card.
- If Jordan takes $9,000 for qualified higher education expenses and documents it, the 10% penalty may not apply, but the $9,000 still increases taxable income.
- If Jordan instead takes $9,000 to pay the credit card with no exception, Jordan may owe income tax and about $900 additional tax (10%), on top of losing compounding.
Jordan compares the tax hit to other cash (HYSA, payment plan with the school) before touching the IRA.
Checklist
- Name the account type (traditional vs Roth) and whether you are touching contributions or earnings.
- Match your reason to a named IRS exception; do not invent a “hardship” label for an IRA.
- Estimate ordinary income tax even when the penalty is waived.
- For SEPP, get the calculation method in writing and commit to the series rules.
- Keep tuition bills, medical statements, closing disclosures, or other proof with your tax file.
- Report correctly on Form 5329 when required.
Educational only. Not tax or legal advice. Exception lists, AGI thresholds, and SECURE 2.0 caps change; confirm on IRS.gov (Pub 590-B, Form 5329 instructions) and with a qualified tax professional before withdrawing.