Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 28, 2026. Quick answer: Several exceptions exist beyond 72(t) and the rule of 55 — disability, certain medical expenses, higher education for IRAs, first-home purchase, birth or adoption, qualified disasters, terminal illness and others. Most carry no lock-in at all.
IRS worksheets for the 2025 return: Early Distribution Repayments Worksheet.
Related reading on this site: IRS Tax Topic 557 and IRS Tax Topic 558.
Related reading on this site: IRS Tax Topic 424 and IRS Tax Topic 451.
Retirement forms read line by line: Form 8915-F, Form 8915-F items A to D and Form 8915-F lines 27 to 32.
Schedule 2 (Form 1040) for 2025, read line by line: Schedule 2 line 8.
Schedule 1 (Form 1040) for 2025, read line by line: Schedule 1 lines 18 and 19.
Form 5329 for 2025, read code by code: Form 5329 exception code 12, Form 5329 exception code 22 and Form 5329 exception code 23.
Read box by box from the IRS form text: Form 1099-R boxes 10 and 11 and the 1099-R IRA/SEP/SIMPLE checkbox.
More IRS forms and schedules, read line by line: Schedule 2 instructions.
Price an IRA withdrawal against the 2026 brackets: IRA withdrawal calculator.
Put a withdrawal through the 2026 brackets: 401(k) withdrawal calculator.
Which exceptions work for a 401(k), and the rest of the withdrawal rules: the 401(k) withdrawal rules.
The form where these exceptions are claimed: Form 5329 Explained.
Which exception applies is worth confirming before you rely on it
The list of exceptions is short, but the dollar caps, the documentation and the repayment rules attached to each one change fairly often, and an adviser can confirm which exception actually fits your account and your situation before you take the distribution.
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Check these before committing to a schedule
A 72(t) commits you for years. A narrower exception that already fits your situation costs nothing and locks in nothing. It is worth ruling them out first.
| Exception | Note |
|---|---|
| Disability | Statutory definition, not a colloquial one |
| Certain unreimbursed medical expenses | Threshold-based |
| Higher education | IRAs only — not 401(k)s |
| First home | IRAs, lifetime dollar cap |
| Birth or adoption | Per child, repayable |
| Terminal illness, qualified disasters, and others | Added or expanded by SECURE 2.0 |
Several of these were added or modified by SECURE 2.0 and have specific dollar caps, thresholds and documentation requirements that this page does not restate. Confirm the current terms of any exception you intend to rely on — they have moved recently and some are repayable, which changes the analysis.
An exception avoids the penalty, not the tax
Every one of these removes the 10% additional tax. None makes the distribution tax-free. Ordinary income tax still applies on a traditional account.
Figures verified against 26 U.S.C. §72(t), Rev. Rul. 2002-62 and Notice 2022-6 on September 30, 2026; the July 2026 professional-analyses cross-check was not re-checked.
Sources
IRC §72(t) (10% additional tax and its exceptions); IRC §72(t)(2)(A)(iv) (substantially equal periodic payments); IRC §72(t)(2)(A)(v) (separation from service at 55); Rev. Rul. 2002-62; Notice 2022-6. Cross-checked July 2026 against professional analyses. Interest rates published for these calculations change monthly and are described structurally here rather than quoted.
This states what the cited authority says. It is not tax advice, and a SEPP schedule is unusually unforgiving of small errors.
For your own numbers, run the AUM Fee Calculator 2026: 1% Advisor Fee in Dollars.
See Read the adviser-hiring guide for more on this.