Updated October 17, 2026. Quick answer: Exception code 20 is for distributions made on or after the date a physician certifies that you have a terminal illness or physical condition that can reasonably be expected to result in death in 84 months or less. You enter the amount on line 2 of Form 5329 with 20 in the space provided.
IRS worksheets for the 2025 return: Early Distribution Repayments Worksheet.
Read box by box from the IRS form text: Form 1099-QA boxes 4 to 6 and Form 5498-QA boxes 5 to 8.
What exception code 20 means
The instructions state it in two sentences: “Distributions due to terminal illness.” “Distributions that are made on or after the date on which your physician has certified that you have a terminal illness or physical condition that can reasonably be expected to result in death in 84 months or less after the date of the certification.”
The instructions point to “Notice 2024-02” for more information.
What Pub. 590-B adds for IRAs
For IRAs, Pub. 590-B explains: “You may be able to take a distribution from an IRA before reaching age 59 1/2 and not have to pay the 10% additional tax on early distributions if you receive the distribution on or after the date you have received a certification by a physician that you are terminally ill.”
It defines the term: “You are considered terminally ill if you are certified by a physician as having an illness or physical condition which can reasonably be expected to result in death in 84 months or less after the date of the certification.”
What the certification must include
Pub. 590-B says “A certification of terminal illness must include the following:” a statement about the 84 months, “A narrative description of the evidence that was used to support the statement of illness or physical condition.” and “It must include the name and contact information of the physician making the statement.”
It also requires dates and signatures: “The statement must include the date the physician examined the individual or reviewed the evidence provided by the individual, and the date that the physician signed the certification.”
One limit applies to physicians: “it is not sufficient evidence for an IRA owner who is a physician to certify the physician’s own terminal illness.”
Timing and how to claim it
The date matters. The instructions cover distributions made “on or after the date on which your physician has certified”, so a distribution before the certification date does not fit this description. The line 2 instruction is “Enter on line 2 the amount that you can exclude.” Write 20 in the space provided. The general overview of exceptions is on early withdrawal penalty exceptions.
How to enter it on line 2
The instructions for line 2 begin “Enter on line 2 the amount that you can exclude.” They continue “In the space provided, enter the applicable exception number”. The form’s own wording for line 2 reads “Enter the appropriate exception number from the instructions”. The earlier lines are covered on the Part I lines 1 to 4 page, and the other exceptions are compared on early withdrawal penalty exceptions. The whole form is mapped in Form 5329 explained.
Where it goes next
Line 2 feeds line 3. The form’s caption for line 3 reads “Amount subject to additional tax. Subtract line 2 from line 1”. Line 4 then reads “Additional tax. Enter 10% (0.10) of line 3.” The form continues “Include this amount on Schedule 2 (Form 1040), line 8”. The instructions say the same for a joint return: “Include the combined tax on Schedule 2 (Form 1040), line 8.” Schedule 2 is explained on the Schedule 2 page.
Edition and line numbers
This page reads the 2025 Form 5329 and its 2025 instructions, and the 2025-returns edition of the Publication where one is cited. These are the current files irs.gov served on 2026-10-17, and they are the forms for the tax year 2025 return, filed in 2026. Check the tax year printed on the form you are filling in and use the line numbers and exception numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Taking money before the certification. The instructions cover distributions “made on or after the date on which your physician has certified”
- Relying on a self-certification by a physician owner. Pub. 590-B says “it is not sufficient evidence for an IRA owner who is a physician to certify the physician’s own terminal illness.”
- Using a certification that leaves out required parts. Pub. 590-B says “A certification of terminal illness must include the following:”
Related: Form 5329 explained, Early withdrawal penalty exceptions, Form 1099-R code 3, and Schedule 2 (Form 1040).
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Answer againSources
- Instructions for Form 5329 (2025): https://www.irs.gov/pub/irs-pdf/i5329.pdf
- Form 5329 (2025): https://www.irs.gov/pub/irs-pdf/f5329.pdf
- Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p590b.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.