You can withdraw from an IRA without penalty once you turn 59½. Before that age, the IRS charges a 10% early withdrawal penalty on top of the regular income tax you already owe, unless your withdrawal fits one of more than a dozen specific exceptions written into federal law. Those exceptions cover disability, death, a first home, education, medical bills, job loss, a new child, domestic abuse, federally declared disasters, military activation, IRS levies, and a structured payment schedule known as a 72(t). Knowing which one fits your situation is what separates a clean withdrawal from a costly one.
The Age 59½ Rule
Turning 59½ is the main threshold. After that birthday, every dollar you pull from a traditional IRA is free of the 10% penalty, though you still owe ordinary income tax on the distribution.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions The IRS measures the age from the exact day you turn 59 years and six months old, not the start or end of the calendar year.
Roth IRAs work a little differently. Reaching 59½ handles the penalty side, but to withdraw earnings tax-free you also have to satisfy a five-year holding period measured from January 1 of the year you first funded any Roth IRA.2Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts Fund your first Roth in 2022 and that clock runs out on January 1, 2027. Earnings withdrawn before that date can still owe income tax even if you’re past 59½.
Roth Contributions You Can Always Withdraw
One rule catches many people off guard. Your Roth IRA contributions, the money you originally put in, can come out at any time and any age without tax or penalty. Roth contributions were made with after-tax dollars, so the IRS treats them as already-taxed money returning to you. When you take a Roth distribution, the IRS applies an ordering rule: contributions come out first, then conversion amounts, then earnings. The 10% penalty and the exceptions below matter for traditional IRA holders and for Roth owners who are reaching past their contributions into earnings.
Death and Disability
If the account owner dies, distributions to beneficiaries or the estate are exempt from the 10% penalty regardless of the beneficiary’s age.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions A 30-year-old inheriting a parent’s IRA can withdraw without the penalty, though traditional IRA distributions still carry income tax.
Total and permanent disability is a separate exception with no age limit. The IRS definition is strict: you must be unable to perform any substantial gainful activity because of a medically determinable physical or mental condition expected to result in death or last indefinitely.3Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts You need a physician’s documentation, and the IRS can ask for whatever proof it considers appropriate. A temporary condition that keeps you out of work for a few months does not qualify.
First-Time Home Purchase
You can withdraw up to $10,000 from an IRA penalty-free to buy a first home. That’s a lifetime cap, not an annual one.4Office of the Law Revision Counsel. 26 U.S.C. 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts If you’re buying with a spouse or partner who also has an IRA, each of you can pull up to $10,000 from your own account, for a combined $20,000.
“First-time homebuyer” is more generous than it sounds. You qualify as long as neither you nor your spouse has owned a principal residence during the two years before the purchase date. Someone who owned a home a decade ago but has been renting for the last three years counts.
The money has to go toward qualified acquisition costs, including the purchase price, closing costs, and settlement fees, within 120 days of the withdrawal. The home can be for you, your spouse, or a child, grandchild, or ancestor of either of you. If the deal falls through, you can roll the distribution back into an IRA within the 120-day window to avoid the penalty.
Higher Education Expenses
IRA distributions used for qualified post-secondary education are exempt from the 10% penalty, with no dollar cap. Qualifying costs include tuition, fees, books, supplies, and equipment required for enrollment at any school eligible to participate in federal student aid programs. Room and board qualify too, but only if the student is enrolled at least half-time.5Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
The expenses don’t have to be your own. Costs for your spouse, children, or grandchildren all count. The penalty-free amount, though, can’t exceed your adjusted qualified education expenses for the year. To find that figure, start with total costs and subtract tax-free assistance like scholarships, veterans’ educational benefits, and employer tuition help. Loans, gifts, and personal savings do not reduce the calculation. If your child receives a $15,000 scholarship against $25,000 in costs, the penalty-free withdrawal is capped at $10,000.
Medical Expenses and Health Insurance During Unemployment
Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income qualify for the exception, but only the portion above that 7.5% floor.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions With an $80,000 AGI and $12,000 in unreimbursed medical bills, the threshold is $6,000 and only the $6,000 above it is penalty-free. You do not have to itemize deductions to use this exception, but you do need to be able to document the expenses.
A separate exception covers health insurance premiums after job loss. You must have received unemployment compensation for 12 consecutive weeks under a federal or state program. The withdrawal has to happen during the year you got unemployment benefits or the year after, and it can only cover premiums you actually paid. This one applies to IRA distributions specifically, not to withdrawals from an employer-sponsored plan like a 401(k).
Birth or Adoption
Each parent can withdraw up to $5,000 penalty-free from an IRA within one year of a child’s birth or the finalization of a legal adoption.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions The $5,000 cap applies per individual, per event. Two parents with their own IRAs can each take $5,000 for the same child. An adopted child must be under 18 or physically or mentally incapable of self-support.
You can also repay the distribution back into your IRA at any point, effectively treating it as an interest-free loan against your future retirement.
Domestic Abuse and Federally Declared Disasters
Starting in 2024, victims of domestic abuse by a spouse or domestic partner can withdraw the lesser of $10,000 (indexed for inflation) or 50% of the IRA balance without the penalty.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions The distribution is taxable, but the tax can be spread across three years, or the amount repaid within three years to reverse it.
If you live in an area affected by a major disaster declared by the President after December 27, 2020, you can withdraw up to $22,000 penalty-free. That cap applies per disaster across all your retirement accounts combined. The income can be spread over three tax years, and you can repay the distribution within three years.
IRS Levies and Military Reservists
When the IRS levies your IRA to collect unpaid federal taxes, the amount seized is exempt from the 10% penalty.1Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions Note the narrow scope: this covers the IRS taking the money, not a voluntary withdrawal you make to pay a tax bill. Income tax still applies to the distribution.
Reservists called to active duty for at least 180 days can take penalty-free IRA distributions during their service period, and can repay the distribution within two years after active duty ends.
Substantially Equal Periodic Payments
If you want steady income from your IRA before 59½ and none of the situational exceptions fit, substantially equal periodic payments offer a structured alternative. Often called a 72(t) distribution or SEPP, this approach commits you to a fixed series of annual withdrawals calculated from your life expectancy.6Internal Revenue Service. Substantially Equal Periodic Payments
The commitment is serious. Once you start, you must continue the payments for at least five full years or until you reach 59½, whichever comes later. Start SEPP at 52 and you must continue until at least 59½. Start at 57 and you must continue until 62, because five years hasn’t elapsed by the time you hit 59½.
The IRS allows three calculation methods (amortization, annuitization, and required minimum distribution), each producing a different annual amount. If you modify the payment schedule or take an extra distribution before the required period ends, the IRS retroactively applies the 10% penalty to every distribution since the payments began, plus interest. SEPP works best with professional guidance.
How to Claim the Exception on Your Tax Return
Your IRA custodian reports every distribution to the IRS on Form 1099-R, and box 7 contains a distribution code. The custodian often doesn’t know you qualify for an exception and codes the distribution as a standard early withdrawal. If you don’t correct it, the IRS will assume you owe the penalty.
The correction happens on Form 5329, Additional Taxes on Qualified Plans and Other Tax-Favored Accounts. On line 2, you enter the amount that qualifies for an exception along with a numbered code identifying which one applies. Code 05 is for medical expenses over 7.5% of AGI, code 08 is for higher education, code 09 is for a first-time home purchase.7Internal Revenue Service. 2025 Instructions for Form 5329 If more than one exception applies to the same distribution, use code 99. File Form 5329 with your federal return for the year the distribution occurred.
Keep documentation in order before you file: medical bills and an AGI calculation, tuition statements and enrollment records, a home purchase contract, a physician’s disability certification, a birth certificate, or an adoption decree, depending on the exception. If the IRS ever questions the claim, those records are what stand between you and a retroactive penalty assessment.