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").

Per Diem Rates

Exceptions to the 10% Early Distribution Penalty

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Generally, distributions 401before age 59 1/2 are subject to a 10% early distribution penalty. However, there are exceptions.

Exceptions

No penalty will be assessed on an early distribution if any of the following situations apply to the distribution(s):

• Tax-free rollovers of distributions.
• Disability distributions due to total disability.
• Separation from service if age 55 or older.
• Medical costs to the extent you pay deductible medical expenses exceeding 7 1/2% of your adjusted gross income even if you don't itemize your deductions.
• Substantially equal payments received for at least five years (at least annually).
• Beneficiaries who receive benefits from a deceased plan participant are subject to an early distribution penalty regardless of your age or the age of the participant.
• IRS levy. Involuntary distribution that results from an IRS levy on your plan account are not subject to the early distribution penalty.
• Distributions paid to an alternate payee pursuant to a qualified domestic relations court order (QDRO) are not subject to early distribution penalty.
• Qualified reservist distribution (this a new law).
  • If you are a member of the reserves called to active duty before December 31, 2007, for over 179 days, or indefinitely, distributions received during the active duty period that are attributable to elective deferrals (410(k) or 403(b) plan) are not subject to the early distribution penalty.
  • A qualified reservist distribution may be recontributed to the plan within two years after the end of the active duty period.
  • These rules apply retroactively to individuals called to active duty after September 11, 2001.
  • A refund claim may be made on an amended return for a penalty paid on a qualified distribution or for tax paid on a recontributed distribution.
• Financial hardship distributions or distributions used for college or home-buying costs:
  • 401(k) plans and 403(b) plans:
    • A 10% penalty applies to distributions made before age 59 1/2 if the distribution came from a 401(k) plan or 403(b) tax-sheltered annuity plan even if the money is used to buy a first home, to pay for college, or needed due to financial hardship.
    • There is an exception for a hardship distribution to pay for medical expenses (see above).
  • IRA:
    • Early distributions (before age 59 1/2) from an IRS are not subject to the 10% early distribution penalty provided the funds are used to buy a first home, pay for college, or needed due to financial hardship.

Form 1099-R: The payer enters Code 2 in box 7 if your are under age 59 1/2  and the payer knows that you qualify for an exception. Form 1099-R is used to report distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, Insurance contracts, etc.

Need more information? If you're so inclined, and want (or need) more information on IRS penalties, check out the Internal Revenue Manual (IRM), part 20, for more details.

IRS Early Distribution Chart

Generally, the amounts an individual withdraws from an IRA or qualified retirement plan before reaching age 59½ are called ”early” or ”premature” distributions. Individuals must pay an additional 10% early withdrawal tax unless an exception applies.

The distribution will NOT be subject to the 10% additional early distribution tax in the following circumstances:	Exception to 10% Additional Tax
	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)

Nonqualified 457(b) plans: Governmental 457(b) distributions 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

**Qualified public safety employees

Effective for distributions after December 31, 2015, the exception for pubic safety employees who are age 50 or over is expanded to include specified federal law enforcement officers, customs and border protection officers, federal firefighters and air traffic controllers.

Also, the restriction that only defined benefit plans qualify for the exemption is eliminated. Thus, an exemption is allowed for distributions from defined contribution plans or other types of governmental plans, such as the TSP. See IRC Section 72(t)(10), as amended by the Defending Public Safety Employees’ Retirement Act, P.L. 114-26.

If No Exceptions Apply

Generally, if no exception applies, early distributions from the following plans are subject to 10% penalty of the amount distributed:

• A qualified corporate or Keogh plan
• Qualified annuity plan
• Tax-sheltered annuity plan
• IRA

How the penalty is assessed: The 10% penalty applies to the amount of the early distribution.

For example, if you receive an early distribution of $10,000, the penalty will be $1,000.