If you begin to receive payments because you are totally and permanently disabled, the distributions are not subject to the additional tax on early withdrawals.
Distributions Made After Employee’s Death
Distributions made upon the participant’s death are not subject to the additional tax. But you will need to review the minimum distribution requirements in the event of an employee’s death. These are explained below in the Tax on Excess Accumulation section.
Exceptions for Qualified Retirement Accounts
These exceptions generally apply to plans through your employer. The following distributions would not be subject to the additional tax on early withdrawals:
Distributions made after your separation from service in the year you reached the age of 55 or later.
Distributions made to an alternate payee under a qualified domestic relations order (court-ordered child support, alimony, or marital property rights).
Distributions to the extent you have medical expenses that exceed 7.5% of your adjusted gross income, regardless of whether you actually itemize deductions
If as of March 1, 1986 you had separated from service and had started receiving payments under a written election providing for a specific schedule of distributions of your entire interest in the plan.
Payments of dividends on securities held in an employee stock ownership plan.
Distributions due to an IRS levy of the plan.
Exceptions for Nonqualified Annuity Contracts
These exceptions apply to retirement plans in the form of annuity contracts, that do not meet the requirements for qualified retirement accounts (above):
Distributions from a deferred annuity contract, of amounts invested in the contract before August 14, 1982.
Distributions under a personal injury settlement from a qualified annuity contract.
Distributions from a qualified annuity contract that your employer purchased when it terminated a qualified employee plan or a qualified employee annuity plan, and that were held until your separation from service.