IRS Issues Notice 2024-55 – Certain Exceptions To The 10 Percent Additional Tax Under Code Section 72(t)

The Internal Revenue Service (IRS) recently issued Notice 2024-55, which concerns exceptions to the 10% additional tax under section 72(t) of the Internal Revenue Code (the Code). These exceptions include emergency personal expenses and domestic abuse victim distributions from qualified retirement plans.

Section 72(t)(1) imposes an additional 10% tax on a distribution from qualified retirement plans unless the distribution qualifies for an exception under section 72(t)(2). Qualified retirement plans include tax-exempt trusts under section 501(a), annuity plans under section 403(a), annuity contracts under section 403(b), individual retirement accounts (IRAs) under section 408(a) or individual retirement annuities under section 408(b).