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🔍 Exception Codes for Additional Tax on Early Distributions Form 5329

This article lists the exception codes you may use on Form 5329 to explain why an early distribution may be exempt from the additional tax.

⚠️ Before You Begin

Use these codes when you are completing Form 5329 for early distributions and need to indicate an exception that applies.

Exception Code Description

01 Qualified retirement plan distributions (does not apply to IRAs) you receive after separation from service in or after the year you reach age 55 (age 50 for qualified public safety employees).

02 Distributions made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from an employer plan, payments must begin after separation from service).

03 Distributions due to total and permanent disability.

04 Distributions due to death (does not apply to modified endowment contracts).

05 Qualified retirement plan distributions up to the amount you paid for unreimbursed medical expenses during the year minus 10% (or 7.5% if you or your spouse are age 65 or older) of your adjusted gross income for the year.

06 Qualified retirement plan distributions made to an alternate payee under a qualified domestic relations order (does not apply to IRAs).

07 IRA distributions made to unemployed individuals for health insurance premiums.

08 IRA distributions made for higher education expenses.

09 IRA distributions made for purchase of a first home, up to $10,000.

10 Distributions due to an IRS levy on the qualified retirement plan.

11 Qualified distributions to reservists while serving on active duty for at least 180 days.

12 Other (see Other below). Also, enter this code if more than one exception applies.

Other. The following exceptions also apply.

Distributions incorrectly indicated as early distributions by code 1, J, or S in box 7 of Form 1099-R. Include on line 2 the amount you received when you were age 59 or older.

Distributions from a section 457 plan, which are not from a rollover from a qualified retirement plan.

Distributions from a plan maintained by an employer if:

• You separated from service by March 1, 1986;
• As of March 1, 1986, your entire interest was in pay status under a written election that provides a specific schedule for distribution of your entire interest; and
• The distribution is actually being made under the written election.

Distributions that are dividends paid with respect to stock described in section 404(k).

Distributions from annuity contracts to the extent that the distributions are allocable to the investment in the contract before August 14, 1982.

Phased retirement annuity payments made to Federal employees.

✅ Helpful Reference

For additional exceptions that apply to annuities, see IRS Publication 575.

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