Updated October 24, 2026. Quick answer: Tax Topic 557 is the IRS page on the additional tax on early IRA distributions. It says you are assessed a 10% additional tax on early distributions from traditional and Roth IRAs unless an exception applies. The page lists the exceptions and explains when Form 5329 is needed.
Quick reference
| Item | What the IRS topic says |
|---|---|
| The tax | “you’ll be assessed a 10% additional tax on early distributions from traditional and Roth IRAs, unless an exception applies.” |
| Who is early | “Generally, early distributions are those you receive from an IRA before reaching age 59” |
| What it applies to | “The 10% additional tax applies to the part of the distribution that you have to include in gross income.” |
| Rollovers | “Distributions that you roll over or transfer to another IRA or qualified retirement plan aren’t subject to this 10% additional tax.” |
| Where it is reported | “The 10% additional tax is reported on Form 5329” |
The additional tax and who it reaches
The topic states its purpose and the rate. The IRS topic says “To discourage the use of IRA distributions for purposes other than retirement, you’ll be assessed a 10% additional tax on early distributions from traditional and Roth IRAs, unless an exception applies.”
On timing it says “Generally, early distributions are those you receive from an IRA before reaching age 59” On the amount, it says “The 10% additional tax applies to the part of the distribution that you have to include in gross income.” It also says “It’s in addition to any regular income tax on that amount.” Our page on early withdrawal penalty exceptions goes through exceptions in more detail.
The exceptions the topic lists
Rollovers come first. The topic says “Distributions that you roll over or transfer to another IRA or qualified retirement plan aren’t subject to this 10% additional tax.” It points to Topic no. 413 for more on rollovers.
A longer list follows. Among the items, the topic names a distribution that is “Made because you’re totally and permanently disabled”, one that is “Made to you because you are terminally ill”, one that is “Made to a beneficiary or estate on account of the IRA owner’s death”, and one that is “Not in excess of your qualified higher education expenses”. It also lists “Not in excess of $10,000 used in a qualified first-time home purchase” and “Not in excess of $5,000 and the distribution is a qualified birth or adoption distribution”.
It adds a corrective case: “Made to you as a corrective distribution, including a returned IRA contribution(s) that is withdrawn by the filing due date (including extensions), not including earnings on these returned contributions”. For distributions from other plans, it says “For information on these exceptions, refer to Topic no. 558 or Publication 575, Pension and Annuity Income.”
Reporting, withholding and estimated tax
On forms, the topic says “The 10% additional tax is reported on Form 5329”. It then explains an easier path: “you don’t have to file Form 5329 if your Form 1099-R” “shows distribution code 1 in Box 7.” Our page on 1099-R box 7 codes covers the codes.
If an exception applies but the form is silent, the topic says “you must file Form 5329 and Schedule 2 to claim the exception.” On withholding, it says “Federal income tax withholding is required for distributions from IRAs unless you elect out of withholding on the distribution.” It adds “If you elect out of withholding, you may have to make estimated tax payments.”
Where this comes from
This page describes the IRS page titled Topic no. 557, Additional tax on early distributions from traditional and Roth IRAs, as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 16 Oct 2026. The IRS can change a topic after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Reading the 10% as the only cost. The topic says it is “in addition to any regular income tax on that amount”
- Treating a rollover as an early distribution. The topic says rollovers “aren’t subject to this 10% additional tax”
- Applying the first-time home exception to any amount. The topic says “Not in excess of $10,000”
- Assuming Form 5329 is always required. The topic says you may not need it when “distribution code 1 in Box 7” appears
- Skipping withholding questions. The topic says withholding is required “unless you elect out of withholding on the distribution”
Related: IRS tax topics by number, Early withdrawal penalty exceptions, 1099-R box 7 codes, Schedule 2 line 8: additional tax on IRAs, Form 5329 exception code 09: first home, and Form 5329 exception code 08: higher education.
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Answer againSources
- IRS, Topic no. 557, Additional tax on early distributions from traditional and Roth IRAs (irs.gov): https://www.irs.gov/taxtopics/tc557
- IRS, Tax topics index (irs.gov): https://www.irs.gov/taxtopics
Read from the IRS pages linked above on October 24, 2026. General information, not tax or legal advice. The IRS topic page and the instructions for your own form control, and your own facts decide the outcome.