Exceptions to the 10% Early Withdrawal Penalty For IRAs - IMPEACHEDD

To remember the exceptions to the 10% early withdrawal penalty, I teach my students and clients to remember the word impeached with an extra d.

IRS - “The distribution is due to an IRS levy of the qualified plan.”

Medical - “You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income (defined earlier) for the year.”

Premium - “You are paying medical insurance premiums during a period of unemployment.”

Education - “The distributions aren't more than your qualified higher education expenses.”

Age 59½ - “You have reached age 59½.”

Certain active duty - “The distribution is a qualified reservist distribution.”

Home - “You use the distribution, [up $10,000] to buy, build, or rebuild a first home.”

Equal payments - “The distributions are part of a series of substantially equal payments.”

Death - “You are the beneficiary of a deceased IRA owner.”

Disability - “You are totally and permanently disabled.”
https://www.irs.gov/publications/p590b#en_US_2019_publink1000231065

These are exceptions to the 10% early withdrawal penalty for IRAs, which is different from qualified plans and nonqualified plans. I included the general distribution rules for 401(k) plans in the blog so you can see the difference.
https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general-distribution-rules

Additional Resources:
● 10% Penalty Exceptions from Ed Slott and Company - https://www.irahelp.com/slottreport/10-penalty-exceptions
● Rollover Chart - https://www.irs.gov/pub/irs-tege/rollover_chart.pdf