IRA Early Withdrawal Exceptions: The Full List (and What Still Gets Taxed)

Early withdrawals from an IRA before age 59½ usually cost you twice: income tax plus a 10% additional tax. The IRS lists specific situations where penalty-free withdrawals are allowed. This guide is for IRA owners under 59½ who need cash and want to check whether a withdrawal qualifies.

Sources: IRS Publication 590-B, Topic 557, the IRS exceptions table, and Notice 2025-67.

An open brass padlock beside a closed cloth-bound ledger, a short stack of coins, and a blank folded sheet on a wooden desk, suggesting penalty-free access to IRA funds.
Early withdrawal exceptions remove the 10% penalty, not the income tax.

How the 10% early withdrawal penalty works

The IRS calls it the additional tax on early distributions under IRC section 72(t). It applies to IRA withdrawals an IRA owner takes before age 59½ unless one of the exceptions to the 10% applies. After age 59½, the 10% early withdrawal penalty ends for any IRA type.

The 10% penalty tax applies only to the part you must include in gross income, on top of regular income tax. For a SIMPLE IRA, the rate is 25% in the first two years of participation.

How much do I lose if I withdraw my IRA early?

In a Pub 590-B example, a 35-year-old takes $3,000 from a traditional IRA with no exception. He adds $3,000 to taxable income and owes an extra $300. Your real cost of early IRA withdrawals also includes your tax bracket, state tax, and the growth your retirement savings lose.

Traditional IRA withdrawal rules vs Roth IRA rules

Traditional IRA withdrawal rules are simple: tax-deductible contributions and earnings are taxed when they come out. See our traditional IRA guide.

Roth IRA withdrawal order: Roth IRA contributions first

Under the IRS ordering rules, a Roth IRA withdrawal comes first from Roth IRA contributions, then conversions, then earnings. Contributions return without tax or penalty. Earnings withdrawn before age 59½ can be taxed and penalized, and each conversion has its own five-year clock. See our Roth IRA guide.

The full list of IRA early withdrawal exceptions

These exceptions to the 10% early withdrawal penalty apply whether you hold a traditional or Roth IRA, a SEP IRA, or a SIMPLE IRA, though each IRA type is taxed differently. Each has conditions; several have a dollar cap or lifetime limit.

Death, disability, and terminal illness

After the account owner’s death, a beneficiary can take penalty-free distributions at any age. A spouse who treats an inherited IRA as their own can lose this. See inherited IRA rules and naming an IRA beneficiary.

Penalty-free withdrawals are allowed for an IRA owner who becomes totally and permanently disabled before age 59½, and for one with a terminal illness a physician certifies is expected to result in death within 84 months.

Unreimbursed medical expenses

Before age 59½, IRA withdrawals up to the unreimbursed medical expenses above 7.5% of your adjusted gross income are penalty free. You need not itemize.

A stethoscope, an unlabeled amber pill bottle, a white envelope, and a blank receipt on a wooden desk, suggesting unreimbursed medical expenses.
Only medical expenses above 7.5% of AGI escape the penalty.

Health insurance premiums while unemployed

If you lost your job and received unemployment compensation for 12 consecutive weeks, amounts up to the health insurance premiums you paid can be withdrawn penalty free. Health insurance for yourself, your spouse, and dependents counts. Take them in the year you received unemployment compensation or the next, and within 60 days of reemployment.

Qualified higher education expenses

Early withdrawals up to qualified higher education expenses for you, your spouse, or your or your spouse’s children or grandchildren qualify. Tuition, fees, books, and required equipment count; costs covered by tax-free aid do not.

A graduation cap resting on a stack of plain hardcover books beside a closed laptop and a pencil, suggesting qualified higher education expenses.
Tuition, fees, books, and required equipment can qualify.

First-time homebuyer: $10,000 lifetime limit

You can take up to $10,000 over your lifetime toward a first home for yourself, your spouse, a child, a grandchild, or a parent, spent within 120 days. You are a first-time buyer if you owned no main home in the prior two years.

A small wooden model house, a brass house key on a ring, and a blank manila folder on a wooden desk, suggesting a first-time homebuyer IRA withdrawal.
The first-home exception has a $10,000 lifetime limit.

Birth or adoption

Penalty-free withdrawals of up to $5,000 per child, such as for adoption expenses, are allowed within one year after a birth or a finalized adoption. You may repay it within three years.

A pair of knitted baby shoes beside a folded blanket and a blank card on a wooden desk, suggesting a birth or adoption distribution.
A birth or adoption distribution is capped at $5,000 per child.

Emergency personal expense distributions

Since 2024, you can take one distribution per calendar year for personal or family emergency expenses, up to the lesser of $1,000 or your vested account balance over $1,000. Without repayment, you must wait three calendar years before another.

Domestic abuse victim distributions

A victim of domestic abuse by a spouse or domestic partner can withdraw, within one year of the abuse, the lesser of $10,500 (2026) or 50% of the account. IRS Notice 2024-55 says domestic abuse includes economic abuse. Repayment is allowed within three years.

Federally declared disasters

Up to $22,000 per disaster is available to someone whose main home was in a federally declared disaster area and who sustained an economic loss. The income can be spread over three years.

Qualified military reservists called to active duty

Reservists called to active duty for more than 179 days or indefinitely can take penalty-free distributions during the active duty period.

IRS levy

If the IRS levies an account owner’s IRA for a tax debt, that amount is not penalized.

Substantially equal periodic payments

Substantially equal periodic payments based on life expectancy allow early withdrawals at any age, but they lock the IRA owner in for five years or until age 59½, whichever is later. See our 72(t) SEPP guide.

Corrective distributions and rollovers

Excess contributions returned by the tax return due date, including extensions, avoid the penalty, though their earnings are taxable. A rollover within 60 days, or a direct transfer, is not penalized.

IRS rules that apply to qualified plans only

Some exceptions apply to a qualified retirement plan such as a 401(k), not to IRA funds. The age-55 separation rule, a qualified domestic relations order payment to an alternate payee, and the new long-term care distribution ($2,600 for 2026) are plan-only. A SEP IRA follows the IRA rules. See QDRO and IRA divorce for IRAs in divorce.

What are the new IRA withdrawal rules for 2026?

The IRS table and Pub 590-B list no new IRA exception for early withdrawals in 2026; the indexed limits changed. Notice 2025-67 raised the domestic abuse cap to $10,500.

How to claim an exception on IRS Form 5329

Your custodian issues Form 1099-R and must use code 1 for many eligible distributions, including medical, education, first-home, and birth or adoption early IRA withdrawals. You then claim one of the exceptions to the 10% on IRS form 5329 with your tax return. Keep receipts.

Federal income tax is withheld from IRA withdrawals unless you elect out, per Topic 557. Taxes withheld are not the penalty tax; you settle both when you file.

Penalty-free is not tax-free

Most penalty-free early withdrawals from a traditional IRA are still ordinary income. Generally only Roth contributions, qualified Roth distributions, and after-tax basis come out tax free. See our tax strategy guide and how Social Security and IRA withdrawals interact.

Later, required minimum distributions currently begin at age 73 for a traditional IRA, while Roth IRAs have no required minimum distributions during the owner’s lifetime; see IRA required minimum distributions. After 70½, a qualified charitable distribution can send IRA money to charity tax free.

Early withdrawals and your retirement funds

Before accessing retirement funds early or you withdraw money from a retirement account, check other options to preserve retirement savings. Even penalty-free withdrawals shrink the retirement account that compounds for you. A tax professional can give tax advice on which exception fits.

Early withdrawal FAQ

How do I avoid the 10% early withdrawal penalty?

Wait until age 59½, use one of the exceptions above, or withdraw only Roth contributions. Claim it on Form 5329 if your 1099-R does not.

What are five exceptions to the 59½ rule?

First-time homebuyer, higher education expenses, medical expenses above 7.5% of AGI, disability, and substantially equal payments.

The bottom line

IRA early withdrawal exceptions waive the 10% penalty in specific, documented cases. They rarely waive income tax, so treat early withdrawals from retirement savings as a last resort.

Written by Tim Schmidt and reviewed for tax and account accuracy by Sean Webster, CPA. Last reviewed November 10, 2026 (America/New_York). This guide is for general education, not tax, legal, or investment advice, and not a recommendation to take a distribution. IRAInvesting.com is not a custodian, broker-dealer, tax preparer, or investment adviser. Talk with a licensed tax professional before you act, and confirm current limits on IRS.gov. Investing involves risk, including possible loss of principal.