72(t) Articles

72(t) Exceptions Explained

The 72(t) distribution will NOT be subject to the 10% additional early distribution tax in the following circumstances:

  • Age: after participant/IRA owner reaches age 59½
  • Automatic Enrollment: permissive withdrawals from a plan with auto enrollment features
  • Corrective Distributions: corrective distributions (and associated earnings) of excess contributions, excess aggregate contributions and excess deferrals, made timely
  • Death: after death of the participant/IRA owner
  • Disability: total and permanent disability of the participant/IRA owner
  • Domestic Relations: to an alternate payee under a Qualified Domestic Relations Order
  • Education: qualified higher education expenses
  • Equal Payments: series of substantially equal payments
  • ESOP: dividend pass through from an ESOP
  • Homebuyers: qualified first-time homebuyers, up to $10,000
  • Levy: because of an IRS levy of the plan
  • Medical: amount of unreimbursed medical expenses (>7.5% AGI; after 2012, 10% if under age 65), or health insurance premiums paid while unemployed
  • Military: certain distributions to qualified military reservists called to active duty
  • Returned IRA Contributions: if withdrawn by extended due date of return, or earnings on these returned contributions
  • Rollovers: in-plan Roth rollovers or eligible distributions contributed to another retirement plan or IRA within 60 days (also see FAQs: Waivers of the 60-Day Rollover Requirement)
  • Separation from Service: the employee separates from service during or after the year the employee reaches age 55 (age 50 for public safety employees of a state, or political subdivision of a state, in a governmental defined benefit plan)

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