Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
10% Early withdrawal Penalty
10% Early Withdrawal Penalty
Generally, withdrawals from a 401(k) plan, IRA, SEP, SIMPLE, SARSEP plans are subject to income taxes in the year funds are withdrawn. If you're under 59 1/2/ when you make a withdrawal it's subject to a 10% early withdrawal penalty. The withdrawal is also subject to income taxes.
For example, if you're in the 15% tax bracket and you withdraw $10,000 before reaching age 59 1/2, you would be subject to a $1,000 early withdrawal penalty and federal income taxes of $1,500.
Exceptions to the 10% Early withdrawal Penalty
The following IRS chart lists exceptions to the 10% penalty:
| Exception to 10% Penalty | |||
|---|---|---|---|
| Qualified Plans (401(k), etc.) |
IRA, SEP, SIMPLE IRA* and SARSEP Plans | Internal Revenue Code Section(s) | |
| Age | |||
| After participant/IRA owner reaches age 59½. | yes | yes | 72(t)(2)(A)(i) |
| Automatic Enrollment | |||
| Permissive withdrawals from a plan with auto enrollment features. | yes | yes for SIMPLE IRAs and SARSEPs | 414(w)(1)(B) |
| Corrective Distributions | |||
| Corrective distributions (and associated earnings) of excess contributions, excess aggregate contributions and excess deferrals, made timely. | yes | n/a | 401(k)(8)(D), 401(m)(7)(A), 402(g)(2)(C) |
| Death | |||
| After death of the participant/IRA owner. | yes | yes | 72(t)(2)(A)(ii) |
| Disability | |||
| Total and permanent disability of the participant/IRA owner. | yes | yes | 72(t)(2)(A)(iii) |
| Domestic Relations | |||
| To an alternate payee under a Qualified Domestic Relations Order. | yes | n/a | 72(t)(2)(C) |
| Education | |||
| Qualified higher education expenses. | no | yes | 72(t)(2)(E) |
| Equal Payments | |||
| Series of substantially equal payments. | yes | yes | 72(t)(2)(A)(iv) |
| ESOP | |||
| Dividend pass through from an ESOP. | yes | n/a | 72(t)(2)(A)(vi) |
| Homebuyers | |||
| Qualified first-time homebuyers, up to $10,000. | no | yes | 72(t)(2)(F) |
| Levy | |||
| Because of an IRS levy of the plan. | yes | yes | 72(t)(2)(A)(vii) |
| Medical | |||
| Amount of unreimbursed medical expenses greater than 7.5% AGI. | yes | yes | 72(t)(2)(B) |
| health insurance premiums paid while unemployed. | no | yes | 72(t)(2)(D) |
| Military | |||
| Certain distributions to qualified military reservists called to active duty. | yes | yes | 72(t)(2)(G) |
| Returned IRA Contributions | |||
| If withdrawn by extended due date of return. | n/a | yes | 408(d)(4) |
| earnings on these returned contributions. | n/a | no | 408(d)(4) |
| 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). | yes | yes | 402(c), 402A(d)(3), 403(a)(4), 403(b)(8), 408(d)(3), 408A(d)(3) |
| 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). | yes | no | 72(t)(2)(A)(v), 72(t)(10) |
Distributions from a governmental 457 (b) plan are not subject to the 10% additional tax except for distributions attributable to rollovers from another type of plan or IRA.
SIMPLE IRA distributions incur a 25% additional tax instead of 10% if made within the first 2 years of participation.