72(t) IRA distributions (SEPPs)

How do I make a 72(t) distribution from my IRA (SEPPs)?

At this time, tastytrade cannot code IRA distributions as a 72(t) distribution, but customers can still claim this exemption when they file their taxes.


At this time, tastytrade cannot code IRA distributions as a 72(t) distribution, but customers can still claim this exemption when they file their taxes.


Regardless of your retirement goals, it’s good to know when and how to tap into your nest egg. The IRS allows penalty-free distributions from your qualified account after reaching 59 ½, but the IRS provides for another penalty-free method before 59 ½ under IRS Rule 72(t).


What is a 72(t) distribution? The IRS allows for withdrawals from an IRA account without penalty if the account holder takes out at least five substantially equal periodic payments (SEPPs). An account holder’s life expectancy and one of three calculation methods:

  1. Required minimum distribution method
  2. Fixed amortization method
  3. Fixed annuitization method


To read more about this IRA distribution method, including calculation methods, you may visit this topic at the IRS by clicking here.


Although this rule can help with avoiding a 10 percent early withdrawal penalty, distributions are subject to ordinary income tax rates.


tastytrade IRA account owners are solely liable and responsible for complying with IRS rule 72(t). Please consult a tax professional if you plan or consider IRS Code 72(t) for your retirement needs.