The traditional IRA withdrawal rules turn on three ages: you can take money out at any time, but distributions before age 59½ generally carry a 10% early-withdrawal additional tax on top of ordinary income tax, penalty-free access opens at 59½, and required minimum distributions must begin at age 73. Every taxable dollar is treated as ordinary income (Source: IRS Pub 590-B, 2025).
A traditional IRA taxes withdrawals as ordinary income. Distributions before age 59½ add a 10% early-withdrawal tax unless an exception applies. Required minimum distributions start at age 73, and the first one is due by April 1 of the year after you turn 73 (Source: IRS Publication 590-B, 2025).
How traditional IRA withdrawals are taxed
Traditional IRA distributions are taxed as ordinary income because contributions generally went in pre-tax and grew tax-deferred. The taxable amount is added to your other income for the year and taxed at your marginal rate. There is no capital-gains treatment inside the account, and any nondeductible basis is returned tax-free under the pro-rata rule (Source: IRS Pub 590-B, 2025).
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Traditional IRA distributions are taxed as ordinary income because the money went in pre-tax and grew tax-deferred. As the IRS states, “Distributions from a traditional IRA are taxed as ordinary income, but if you made nondeductible contributions, not all of the distribution is taxable” (Source: IRS Pub 590-B, 2025). The taxable portion is added to your other income for the year and taxed at your marginal rate.
There is no separate capital-gains treatment inside a traditional IRA. Whether the growth came from dividends, interest, or appreciation, the taxable part of any withdrawal is ordinary income when it leaves the account.
The pro-rata rule when you have nondeductible basis
If you ever made nondeductible contributions, part of each withdrawal is a tax-free return of that basis. The nontaxable share is figured under the pro-rata rule across the combined balance of all your traditional IRAs and reported on Form 8606, so the after-tax dollars are not withdrawn first (Source: IRS Pub 590-B, 2025; IRS Instructions for Form 8606, 2025).
Example: suppose your traditional IRAs total $200,000 and include $20,000 of nondeductible basis, so 10% of the account is basis. If you withdraw $10,000, roughly $1,000 is nontaxable and $9,000 is taxable. This applies even if the $10,000 comes from a different IRA than the one that holds the basis (Source: IRS Pub 590-B, 2025).
State income tax on IRA withdrawals
Federal ordinary-income tax and the 10% early-withdrawal tax are only part of the picture. Many states also tax IRA distributions as income, while some exempt part or all of retirement income and a handful levy no income tax at all. The rules vary by state and by your age and income, so the after-tax result depends on where you live (Source: IRS Pub 590-B, 2025, for federal treatment). Because state treatment is not addressed in federal IRS guidance, your own state’s current statute governs that portion.
Traditional IRA withdrawal rules before age 59½
Withdrawals before age 59½ are early distributions. The part includible in gross income is subject to a 10% additional tax on top of ordinary income tax, unless a specific exception applies. You report the exception, or the tax, on Form 5329. An exception waives the penalty only; the taxable portion is still ordinary income (Source: IRS Topic 557; IRS Pub 590-B, 2025).
Withdrawals taken before age 59½ are early distributions. The part includible in gross income is subject to a 10% additional tax on top of ordinary income tax, unless a specific exception applies (Source: IRS Topic 557). You report the exception, or the tax, on Form 5329.
Exceptions to the 10% early-withdrawal tax
The 10% additional tax is waived when a distribution meets one of the exceptions below. The exception removes the penalty only. The distribution is still taxable as ordinary income to the extent it is includible in income (Source: IRS Topic 557; IRS Pub 590-B, 2025).
| Exception (IRA) | 2026 limit or condition |
|---|---|
| First-time homebuyer | Up to $10,000 lifetime |
| Qualified higher-education expenses | No dollar cap |
| Unreimbursed medical expenses | Amount exceeding 7.5% of AGI |
| Health insurance premiums while unemployed | IRA-specific; qualifying conditions apply |
| Total and permanent disability | No dollar cap |
| Substantially equal periodic payments (SEPP / 72(t)) | Series must run per IRC 72(t) |
| Qualified birth or adoption | Up to $5,000 per child/adoptee |
| Terminal illness | Certified terminally ill individual |
| Emergency personal expense (SECURE 2.0) | $1,000 per year, repayable within 3 years |
| Domestic abuse victim (SECURE 2.0) | Lesser of $10,500 (2026) or 50% of account |
| IRS levy on the IRA | Amount of the levy |
| Qualified reservist distribution | Called to active duty |
| Federally declared disaster | Up to $22,000 per disaster |
| Death of the account owner | Distributions to beneficiary/estate |
The SECURE 2.0 exceptions are the ones most often out of date on legacy pages. The domestic-abuse cap is inflation-indexed at $10,500 for 2026, up from $10,300 for 2025, and equals the lesser of that amount or 50% of the account value (Source: IRS Notice 2025-67; IRS Pub 590-B, 2025). The $1,000 annual emergency personal-expense withdrawal may be repaid at any time during the 3-year period beginning the day after the distribution (Source: SECURE 2.0 Act Sec. 115; IRS Notice 2024-55). The qualified disaster recovery exception, added by SECURE 2.0 as IRC 72(t)(2)(M), allows a designated distribution of up to $22,000 per qualified disaster (Source: SECURE 2.0 Act Sec. 331; IRS Notice 2024-55; IRS Disaster Relief FAQs under SECURE 2.0).
Traditional IRA withdrawal rules at 59½ and older
Once you reach age 59½, you can take any amount from a traditional IRA without the 10% early-withdrawal tax. Distributions remain taxable as ordinary income to the extent includible in income, but the penalty no longer applies regardless of the reason. No distributions are required at this stage, and you can keep contributing earned income (Source: IRS Topic 557; IRS Pub 590-B, 2025).
Once you reach age 59½, you can take any amount from a traditional IRA without the 10% early-withdrawal tax. Distributions remain taxable as ordinary income to the extent includible in income, but the penalty no longer applies regardless of the reason (Source: IRS Topic 557; IRS Pub 590-B, 2025). There is no requirement to withdraw at this stage, and you can keep contributing earned income.
The window between 59½ and 73 is when many households have the most control over timing. Because no distributions are yet required, some people study whether spreading withdrawals or a Roth conversion across lower-income years fits their situation. Large withdrawals can also affect other thresholds, such as the taxation of Social Security, Medicare IRMAA surcharges, and the net investment income tax. These are factors to weigh with a qualified professional (Source: IRS Pub 590-B, 2025, for IRA taxation).
Traditional IRA withdrawal rules at age 73: RMDs
Required minimum distributions begin at age 73 for those who reach age 72 after December 31, 2022. The first RMD is due by April 1 of the year after you turn 73, and each later year’s RMD is due by December 31. Under SECURE 2.0, the required beginning age rises to 75 for those born in 1960 or later (Source: IRS Pub 590-B, 2025; SECURE 2.0 Act Sec. 107).
Required minimum distributions begin at age 73 for those who reach age 72 after December 31, 2022. As the IRS states, “If you reach age 72 after December 31, 2022, you must begin receiving required minimum distributions by April 1 of the year following the year you reach the age 73” (Source: IRS Pub 590-B, 2025). Each later year’s RMD is due by December 31.
Under SECURE 2.0, the applicable age rises to 75 for individuals who attain age 74 after December 31, 2032, which reaches those born in 1960 or later, beginning in 2033 (Source: SECURE 2.0 Act Sec. 107, amending IRC 401(a)(9)(C)(v); IRS Retirement Plan and IRA RMD FAQs). The RMD age for individuals reaching that age today remains 73.
How RMDs are calculated
An RMD equals your prior December 31 account balance divided by an IRS life-expectancy factor for your age. With multiple traditional IRAs, you compute the amount separately for each account but may withdraw the total from any one or more of them (Source: IRS Pub 590-B, 2025).
- Take the traditional IRA balance as of December 31 of the prior year.
- Find your life-expectancy factor from the IRS Uniform Lifetime Table for your age.
- Divide the balance by the factor. The result is that year’s RMD.
- Withdraw at least that amount by the deadline (April 1 for the first year, December 31 thereafter).
Example: a $500,000 balance divided by a factor of 26.5 produces an RMD of about $18,868 for the year (Source: IRS Pub 590-B, 2025, for the calculation method; use the current-year IRS table for your factor). You can always withdraw more than the RMD, though the extra is still taxed as ordinary income. For the deeper mechanics, see our 2026 required minimum distributions guide.
What happens if you miss an RMD
Missing an RMD triggers an excise tax of 25% of the shortfall under IRC Section 4974, reduced from the former 50% rate by SECURE 2.0. The tax drops further to 10% if you correct the missed distribution within the correction window, generally the end of the second year after the missed year. The correction is reported on Form 5329 (Source: SECURE 2.0 Act Sec. 302; IRS RMD FAQs).
Missing an RMD triggers an excise tax of 25% of the shortfall. That penalty drops to 10% if you correct the missed distribution within the correction window, generally the end of the second year that begins after the year of the missed distribution. SECURE 2.0 reduced the base excise tax from the former 50% to 25% (Source: SECURE 2.0 Act Sec. 302, amending IRC 4974; IRS RMD FAQs). The correction is reported on Form 5329.
Qualified charitable distributions
From age 70½, an IRA owner may send funds directly from the IRA trustee to an eligible charity as a qualified charitable distribution. A QCD can count toward your RMD for the year and is excluded from taxable income, unlike an ordinary taxable withdrawal. The annual QCD exclusion is $111,000 for 2026 (Source: IRS Pub 590-B, 2025; IRS Notice 2025-67).
From age 70½, an IRA owner can send funds directly from the IRA trustee to a qualified charity as a qualified charitable distribution (QCD). A QCD can count toward your RMD for the year and is excluded from taxable income, unlike an ordinary withdrawal (Source: IRS Pub 590-B, 2025). The maximum annual QCD exclusion is indexed to $111,000 for 2026 (Source: IRS Notice 2025-67). It is one approach the rules allow for charitably inclined retirees.
After-tax dollar math across the three age brackets
The same $50,000 taxable traditional IRA withdrawal costs the same federal income tax at every age, because it is ordinary income. Only the 10% early-withdrawal tax changes, applying before age 59½ when no exception is met. At an assumed 22% federal rate, that is $11,000 of income tax, plus $5,000 more if the early tax applies (Source: IRS Topic 557; IRS Pub 590-B, 2025).
The table below shows how the same $50,000 traditional IRA withdrawal can land differently by age, assuming a 22% federal ordinary-income rate and no nondeductible basis. State tax is excluded because it varies. Figures illustrate the federal rules only (Source: IRS Topic 557 and Pub 590-B, 2025, for the rules; rate assumed for illustration).
| Scenario | Federal income tax (22%) | 10% early tax | Total federal tax |
|---|---|---|---|
| Before 59½, no exception | $11,000 | $5,000 | $16,000 |
| Before 59½, exception applies | $11,000 | $0 | $11,000 |
| Age 59½ or older | $11,000 | $0 | $11,000 |
The 10% early-withdrawal tax is the only line that changes with age or an exception. Ordinary income tax on the taxable portion applies in every bracket (Source: IRS Topic 557; IRS Pub 590-B, 2025).
Traditional vs. Roth withdrawal rules
Traditional and Roth IRAs differ mainly in when tax is paid and whether distributions are required. Traditional IRA withdrawals are taxed as ordinary income and require RMDs from age 73. Qualified Roth IRA withdrawals are generally tax-free, and the owner has no lifetime RMDs. Both apply the 10% early tax before age 59½, with exceptions (Source: IRS Pub 590-B, 2025).
Traditional and Roth IRAs differ mainly in when tax is paid and whether distributions are required. The table summarizes the withdrawal-side differences (Source: IRS Pub 590-B, 2025).
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on qualified withdrawals | Ordinary income | Generally tax-free |
| 10% early tax before 59½ | On taxable portion, exceptions apply | On earnings, exceptions apply |
| RMDs for the owner | Yes, from age 73 | No RMDs for the owner |
Because the two accounts tax withdrawals differently, some households study a Roth conversion to shift future taxable income. Contribution limits also matter here, and our 2026 contribution limits guide covers the current figures (Source: IRS Notice 2025-67 for 2026 limits).
Inherited traditional IRAs and the 10-year rule
A beneficiary who inherits a traditional IRA follows separate rules. For owners who die after 2019, many non-spouse beneficiaries must empty the account by the end of the tenth year after the owner’s death. Inherited-IRA distributions are exempt from the 10% early-withdrawal tax but remain taxable as ordinary income to the beneficiary (Source: IRS Pub 590-B, 2025; SECURE Act 2019).
A beneficiary who inherits a traditional IRA follows separate rules. Under the SECURE Act, for account owners who die after December 31, 2019, many non-spouse beneficiaries must distribute the entire account by the end of the tenth year following the owner’s death (Source: SECURE Act of 2019; IRS Pub 590-B, 2025). Eligible designated beneficiaries, such as a surviving spouse, a minor child of the owner, a disabled or chronically ill person, or a beneficiary not more than 10 years younger than the owner, are excepted from the 10-year rule. Inherited-IRA distributions are exempt from the 10% early-withdrawal tax and remain taxable as ordinary income to the beneficiary (Source: IRS Topic 557; IRS Pub 590-B, 2025).
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Q3 Advisors is a registered investment adviser focused on retirement tax planning. This article is educational and is not advice; for guidance on your own circumstances, consult a qualified tax or financial professional.
Frequently asked questions
Can I take money from my traditional IRA, or my SEP or SIMPLE IRA, while I am still working?
Yes. Traditional, SEP, and SIMPLE IRA rules let you take distributions at any time while working, because IRAs have no employment-related restriction on withdrawals. Amounts taken before age 59½ may still carry the 10% early-withdrawal additional tax unless an exception applies. The taxable portion of any distribution is ordinary income to the extent it is includible in income (Source: IRS Pub 590-B, 2025).
When can I withdraw from an IRA without penalty?
You can withdraw without the 10% early-withdrawal tax starting at age 59½, or earlier if a listed exception applies, such as total and permanent disability, qualified higher-education expenses, or a first home up to $10,000 lifetime. The withdrawal is still taxed as ordinary income to the extent it is includible in income, so the penalty and the income tax are separate items (Source: IRS Topic 557, 2026).
If I withdraw money from my IRA before age 59½, which forms do I need?
An early distribution is reported to you on Form 1099-R from your custodian and entered on your Form 1040. You use Form 5329 to report the 10% additional tax or to claim an exception to it, and Form 8606 if the IRA holds nondeductible basis so the tax-free portion is figured correctly. Keep prior Forms 8606 to track basis (Source: IRS Instructions for Form 8606, 2025; IRS Pub 590-B, 2025).
How much must I take out of my IRA at age 73?
Your first RMD equals your prior December 31 balance divided by your IRS life-expectancy factor, and it is due by April 1 of the year after you turn 73. There is no fixed dollar amount, because it depends on your balance and your age factor from the IRS Uniform Lifetime Table. Later RMDs are due by December 31 each year (Source: IRS Pub 590-B, 2025).
How much are taxes on a $50,000 IRA distribution?
A $50,000 taxable distribution is added to your other ordinary income for the year, so the tax depends on your bracket. At an assumed 22% federal rate that is about $11,000, plus a $5,000 early-withdrawal additional tax if you are under age 59½ without an exception. State income tax may also apply depending on where you live (Source: IRS Topic 557; IRS Pub 590-B, 2025).
What happens if you miss an RMD?
Missing an RMD triggers a 25% excise tax on the amount not taken, reduced from the former 50% rate by SECURE 2.0. The tax drops to 10% if you correct the shortfall within the IRS correction window, generally the end of the second year after the missed year. The correction is reported on Form 5329 (Source: SECURE 2.0 Act Sec. 302; IRS RMD FAQs).
Can a qualified charitable distribution satisfy my RMD?
Yes. From age 70½, a qualified charitable distribution sent directly from your IRA trustee to an eligible charity can count toward your RMD for the year and is excluded from taxable income, unlike a standard taxable withdrawal. The annual QCD exclusion is indexed, reaching $111,000 for 2026 (Source: IRS Pub 590-B, 2025; IRS Notice 2025-67).
Are IRA distributions taxable after age 70?
Yes. Age does not make traditional IRA withdrawals tax-free. Distributions remain taxable as ordinary income to the extent includible in income at every age, including after age 70 and after RMDs begin at 73. Only a qualified charitable distribution or a return of nondeductible basis avoids tax on part or all of the amount (Source: IRS Pub 590-B, 2025).
Sources
IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements, https://www.irs.gov/publications/p590b. IRS Tax Topic 557, Additional Tax on Early Distributions from Traditional and Roth IRAs, https://www.irs.gov/taxtopics/tc557. IRS Tax Topic 558, https://www.irs.gov/taxtopics/tc558. IRS Instructions for Form 8606 (2025), https://www.irs.gov/instructions/i8606. IRS Notice 2025-67 (2026 COLA figures), https://www.irs.gov/pub/irs-drop/n-25-67.pdf. IRS Notice 2024-55 (SECURE 2.0 emergency personal expense and domestic-abuse exceptions), https://www.irs.gov/pub/irs-drop/n-24-55.pdf. IRS Disaster Relief FAQs, Retirement Plans and IRAs under the SECURE 2.0 Act, https://www.irs.gov/newsroom/disaster-relief-frequent-asked-questions-retirement-plans-and-iras-under-the-secure-20-act-of-2022. IRS Retirement Plan and IRA Required Minimum Distributions FAQs, https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs. IRS newsroom, 2026 IRA and 401(k) limits, https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500. SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023), Sections 107, 115, 302, and 331, https://www.congress.gov/bill/117th-congress/house-bill/2617/text. SECURE Act of 2019 (Setting Every Community Up for Retirement Enhancement Act). IRC 72(t) and 4974, https://www.law.cornell.edu/uscode/text/26/72.
