Updated October 24, 2026. Quick answer: Tax Topic 558 is the IRS page on the additional tax on early distributions from retirement plans other than IRAs. It says the additional tax is equal to 10% of the portion of the distribution that is includible in gross income. The page lists exceptions and explains how to report the tax.
Quick reference
| Item | What the IRS topic says |
|---|---|
| The tax | “The additional tax is equal to 10% of the portion of the distribution that’s includible in gross income.” |
| Who is early | “Generally, early distributions are those you receive from a qualified retirement plan or deferred annuity contract before reaching age 59” |
| Separation at 55 | “Distributions made to you after you separated from service with your employer after attainment of age 55.” |
| Medical expenses | “Distributions to the extent you have deductible medical expenses that exceed 7.5% of your adjusted gross income whether or not you itemize your deductions for the year.” |
| Where it is reported | “Report the 10% additional tax on Schedule 2 (Form 1040), Additional Taxes” |
The additional tax and the plans it covers
The topic opens with the rule. The IRS topic says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans.” On the size of it, “The additional tax is equal to 10% of the portion of the distribution that’s includible in gross income.”
The topic defines a qualified retirement plan with a list that includes “A qualified employee plan under section 401(a), such as a section 401(k) plan” and “A tax-sheltered annuity plan under section 403(b) for employees of public schools or tax-exempt organizations, or” It also says “In general, an eligible state or local government section 457 deferred compensation plan isn’t a qualified retirement plan”. Our page on 457(b) plans and early withdrawals covers that plan type.
Exceptions that apply outside an IRA
Rollovers are not taxed. The topic says “Distributions that aren’t taxable, such as distributions that you roll over to another qualified retirement plan, aren’t subject to this 10% additional tax.” It then says “The exceptions below apply to distributions from a qualified plan other than an IRA.”
Among them are “Distributions made because you’re totally and permanently disabled.” and “Distributions made to you after you separated from service with your employer after attainment of age 55.” There is also “Distributions made to an alternate payee who is the spouse or former spouse of the participant pursuant to a qualified domestic relations order.”
For medical costs, “Distributions to the extent you have deductible medical expenses that exceed 7.5% of your adjusted gross income whether or not you itemize your deductions for the year.” The topic also lists “Distributions up to $5,000 made to you from a defined contribution plan if the distribution is a qualified birth or adoption distribution.” It points readers to “Refer to Topic no. 557 for information on the tax on early distributions from IRAs.” See also the rule of 55 for 401(k) plans.
Reporting and estimated tax
The topic says “Report the 10% additional tax on Schedule 2 (Form 1040), Additional Taxes” It then says you must also file Form 5329 if “distribution code 1 isn’t shown in the appropriate box of Form 1099-R”, or if an exception applies but the form does not identify it. In the other case, “you don’t need to file Form 5329 if your distribution is subject to the 10% additional tax and a distribution code 1 shows in the appropriate box.”
On payments during the year, the topic says “if your distribution is subject to the 10% additional tax, your withholding may not be enough.” It adds “You may have to make estimated tax payments.” Our page on Schedule 2 line 8 shows the entry.
Where this comes from
This page describes the IRS page titled Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs, as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 24 Sep 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
- Treating a 457 plan like a 401(k). The topic says such a plan “isn’t a qualified retirement plan” in general
- Reading the age 55 exception as automatic at 55. The topic ties it to when “you separated from service with your employer”
- Treating a rollover as taxable. The topic says rollovers “aren’t subject to this 10% additional tax”
- Assuming withholding covers the extra tax. The topic says “your withholding may not be enough”
Related: IRS tax topics by number, Early withdrawal penalty exceptions, Rule of 55: 401(k) only, 457(b) and early withdrawals, Form 5329 exception code 01: separation from service, and Form 5329 exception code 06: QDRO alternate payee.
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Answer againSources
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
- 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.