How Much Tax Do You Pay on an IRA Withdrawal?

How much tax you pay on an IRA withdrawal depends on the account type and your age. Money taken from a traditional IRA is taxed as ordinary income at your federal marginal rate, which runs from 10% to 37% in 2026. Qualified withdrawals from a Roth IRA come out entirely tax-free. Take money from either account before age 59½ and you generally owe an extra 10% penalty on top of any income tax due.

Traditional IRA Withdrawals: Ordinary Income

Every dollar you pull from a traditional IRA is added to your taxable income for the year you receive it. That covers both your original contributions and all the growth inside the account, because most contributions were deducted when they went in and the IRS collects its share on the way out.¹

The withdrawal stacks on top of your wages, Social Security, and anything else you earned. Your rate isn’t fixed by the size of the distribution alone; it’s set by where the distribution lands within your total income for the year.

One exception matters if it applies to you. If you ever made nondeductible traditional IRA contributions (after-tax money you didn’t deduct), you’ve already paid tax on that portion and don’t owe it again. You can’t cherry-pick which dollars come out first, though. The IRS requires a pro-rata calculation across all your traditional IRAs, so every withdrawal is treated as a proportional mix of taxable and nontaxable money. You track the basis on Form 8606.² If you’ve never made nondeductible contributions, the entire withdrawal is taxable.

Roth IRA Withdrawals: Often Zero

Roth IRAs run the other way. You contribute after-tax dollars, and qualified withdrawals come out with no federal income tax. A distribution qualifies if you’ve held the Roth for at least five tax years and you’re 59½ or older.³ Meet both conditions and the whole amount, including decades of growth, is tax-free.

Even when a distribution doesn’t qualify, your original contributions can come out tax-free at any time, since you already paid tax on them. The IRS applies a set ordering rule to Roth withdrawals: regular contributions come out first, then any converted amounts, and earnings last.³ You only owe income tax on a non-qualified Roth distribution once you’ve withdrawn more than the total of your contributions and conversions and are pulling from earnings.

2026 Federal Tax Brackets on IRA Income

Because a traditional IRA withdrawal is ordinary income, the rate you actually pay depends on where the distribution falls in the bracket structure. The 2026 brackets for single filers are:⁴

10% on income up to $12,400
12% on $12,401 to $50,400
22% on $50,401 to $105,700
24% on $105,701 to $201,775
32% on $201,776 to $256,225
35% on $256,226 to $640,600
37% on income over $640,600

For married couples filing jointly, each threshold is roughly double the single-filer figure — the 22% bracket, for instance, starts at $100,800.⁴

The stacking effect is what most people miss. If you have $60,000 in wages and take a $30,000 traditional IRA distribution, that distribution isn’t taxed starting at zero. It’s taxed at the marginal rates that apply to your income between $60,000 and $90,000. A large withdrawal in a single year can push part of the distribution into a higher bracket than you sit in normally, which is why spreading withdrawals across multiple years often lowers the total tax bill.

The 10% Early Withdrawal Penalty

Taking money from a traditional IRA before age 59½ generally triggers a 10% additional tax on top of the ordinary income tax.⁵ The penalty attaches to the taxable portion of the withdrawal. For most traditional IRA distributions that’s the full amount; for a non-qualified Roth distribution it’s only the earnings piece, since contributions have already been taxed.

Consider a concrete example. Someone in the 22% bracket who takes an early $20,000 traditional IRA withdrawal owes $4,400 in income tax plus a $2,000 penalty. That’s $6,400 gone, or 32% of the distribution. Move into the 24% bracket and more than a third of every dollar disappears. The penalty is reported on Form 5329 with your annual return.⁶

When the 10% Penalty Doesn’t Apply

Congress has carved out a long list of situations where you can access IRA funds before 59½ without the 10% penalty. Regular income tax still applies to traditional IRA withdrawals in all of these cases; the exceptions only waive the penalty.⁷ The most commonly used include:

Total and permanent disability that prevents substantial gainful activity.
Terminal illness certified by a physician.
Unreimbursed medical expenses above 7.5% of your adjusted gross income.
Health insurance premiums after at least 12 consecutive weeks of unemployment compensation.
Higher education expenses (tuition, fees, books, required supplies) for you, your spouse, or your children.
Up to $10,000 lifetime for a first-time home purchase, used within 120 days; “first-time” means you and your spouse haven’t owned a principal residence in the previous two years.⁸
Up to $5,000 per parent following a birth or legal adoption.
Amounts the IRS seizes to satisfy a tax debt.

Substantially Equal Periodic Payments

One exception doesn’t require any specific hardship. Under the substantially equal periodic payments rule (sometimes called SEPP or “72(t) payments”), you set up a schedule of withdrawals calculated from your life expectancy and, as long as you don’t change the schedule, the 10% penalty doesn’t apply. The IRS allows three calculation methods: the required minimum distribution method, the fixed amortization method, and the fixed annuitization method.⁹

The catch is commitment. Once you start, you can’t skip, take extra, or add money to the account until the later of five years or reaching 59½. Break the schedule and the IRS retroactively applies the 10% penalty to every distribution you took under it, plus interest.⁹

SECURE 2.0 Additions

The SECURE 2.0 Act added several newer exceptions:

Up to $1,000 per year for an unforeseeable personal emergency, with no additional emergency distribution allowed for three years unless the earlier amount is repaid.
Up to the lesser of $10,000 (indexed) or 50% of the account balance for a domestic abuse victim, taken within one year of the abuse.
Up to $22,000 for someone whose principal residence is in a federally declared disaster area and who has suffered an economic loss, taken within 180 days of the latest applicable date.¹⁰

Withholding at Distribution Isn’t Your Final Tax

When you request a traditional IRA distribution, the custodian withholds 10% for federal income tax by default. You can raise or lower that (all the way to 0% or up to 100%) by filing Form W-4R with the custodian.¹¹ Withholding is a prepayment, not your actual tax. If your marginal rate is 22% or 24% and you leave the default at 10%, you’ll owe the difference at filing, and a large enough gap can trigger underpayment penalties.

A different rule applies to eligible rollover distributions from an employer plan (like a 401(k)) that aren’t sent directly to another retirement account: 20% federal withholding is mandatory and can’t be waived. If you’re doing an indirect rollover, you receive only 80% of the balance but must deposit the full amount into the new IRA within 60 days to avoid tax on the whole thing. You have to make up the 20% from other funds and wait for it to come back as a refund.¹¹

State Income Tax on IRA Withdrawals

Federal tax isn’t the whole picture. Eight states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming) have no state income tax, so IRA withdrawals face only the federal side there. A handful of other states with income taxes specifically exempt retirement distributions. The rest tax IRA withdrawals at their standard rates, and some require mandatory withholding at a flat rate on every distribution. If both federal and state tax will apply, ask your custodian to set withholding at a level that covers both so you’re not surprised in April.

One Related Cost to Know About

Traditional IRA owners can’t defer forever. Starting at age 73 (or 75 for those born in 1960 or later), the IRS requires annual required minimum distributions, and missing one carries its own excise tax: 25% of the shortfall, reduced to 10% if corrected within the window set out in the law.¹² Original Roth IRA owners are exempt from RMDs during their lifetime.¹³ That penalty is separate from the tax on a withdrawal itself, but worth knowing if you’re weighing when to take money out.

1
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
2
Internal Revenue Service. Instructions for Form 8606 – Nondeductible IRAs
3
Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs
4
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
5
Office of the Law Revision Counsel. 26 USC 72 – Annuities, Certain Proceeds of Endowment and Life Insurance Contracts
6
Internal Revenue Service. Instructions for Form 5329 – Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
7
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
8
Office of the Law Revision Counsel. 26 USC 72 – Annuities, Certain Proceeds of Endowment and Life Insurance Contracts
9
Internal Revenue Service. Substantially Equal Periodic Payments
10
Internal Revenue Service. Retirement Plans and IRAs Under the SECURE 2.0 Act of 2022
11
Internal Revenue Service. Pensions and Annuity Withholding
12
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
13
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs