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Early Withdrawal Penalty Calculator10 Percent Additional Tax (IRC 72(t))

What does this come to under the current IRS rules?

Ten percent additional tax on an early retirement distribution, with the full, birth or adoption, emergency and medical exceptions.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Additional tax (10 percent)
$1,400
On top of regular income tax
Distribution subject to the tax
$14,000
Amount covered by the exception
$6,000
Drawn to one scale
Additional tax (10 percent)$1,400
Distribution subject to the tax$14,000
Amount covered by the exception$6,000
All results
MeasureResult
Additional tax (10 percent)$1,400
Distribution subject to the tax$14,000
Amount covered by the exception$6,000
How this was worked out
Work shownrecomputed as you type
Additional tax = 10% x (taxable distribution - amount covered by an exception)
Birth or adoption: up to $5,000 per child
Emergency: lesser of $1,000 or (benefit - $1,000)
Medical: expenses - 7.5% x AGI

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Additional tax = 10% x (taxable distribution - amount covered by an exception)
  • Birth or adoption: up to $5,000 per child
  • Emergency: lesser of $1,000 or (benefit - $1,000)
  • Medical: expenses - 7.5% x AGI

How it works

Section 72(t) adds 10 percent to the taxable part of a distribution from a qualified retirement plan unless an exception applies. The tax is separate from regular income tax on the same money.

This tool covers the exceptions whose amounts are plain in the statute: a full exception for age 59 and a half, death, disability, a series of substantially equal payments, or separation from service after age 55; a $5,000 qualified birth or adoption distribution; a $1,000 emergency personal expense distribution; and medical expenses deductible under section 213. Other exceptions exist and are not modeled.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Does the exception for separation after 55 apply to IRAs?

Section 72(t)(2)(A)(v) is written for distributions to an employee after separation from service, so it concerns employer plans.

How many emergency distributions are allowed?

One per calendar year under section 72(t)(2)(I).

Is the 7.5 percent figure fixed?

The section 213(a) floor is 7.5 percent of AGI for tax years after 2020.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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