Map an early distribution against the IRS exception table

Key facts

Human involvement

Yellow · Close supervision

How AI is used

Place the withdrawal next to the row on the IRS table that the file might meet, and copy that row's plan column, IRA column and dollar cap. Do not decide that an exception applies.

What the lawyer must review

The IRS exceptions page says amounts withdrawn from an IRA or retirement plan before age 59½ are early distributions, and an additional 10 per cent tax applies unless an exception applies. The page's table is the list. Some rows apply only to a qualified plan, and some only to an IRA: qualified higher-education expenses and the first-time homebuyer cap are marked for an IRA and not for a qualified plan; a qualified domestic relations order and separation from service are marked for a qualified plan and not for an IRA. Separation from service uses the year the employee reaches age 55, or age 50 for the public-safety employees the footnote describes. A governmental 457(b) plan is not subject to the 10 per cent additional tax except for amounts rolled in from another plan or IRA. A SIMPLE IRA distribution in the first two years of participation draws 25 per cent instead of 10 per cent. Copy every cap from the table. Do not supply one from memory. An exception to the additional tax is not a statement that the plan permits the withdrawal. There is no preservation rule in this version. Opinion 512: you decide whether an exception applies.

Written for / version

United States versionUS