Retirement Distribution Tax Calculator

Quick summary

The Retirement Distribution Tax Calculator models exactly what you'll owe when you pull money from a 401(k), Traditional IRA, Roth IRA, Roth 401(k), or pension. Tax on retirement distributions can hit 30-50% combined federal + state + 10% early-withdrawal penalty if you don't plan correctly.

It applies the 2026 OBBBA permanent ordinary brackets, the 10% early withdrawal penalty (IRC §72(t)) for distributions before age 59½, the Roth qualified-distribution rules (5-year holding + age 59½ = entirely tax-free), Roth basis-recovery ordering (contributions out tax-free first, then earnings), SECURE 2.0 Act exceptions (disaster $22K, birth/adoption $5K, terminal illness, SEPP, first-time home $10K, qualified higher education), and bracket-stacking with your other ordinary income.

Use it before the year ends to plan partial Roth conversions, time withdrawals to lower-tax years, and split distributions across calendar years to stay under bracket thresholds.

Account type

Filing status

Distribution amount

Your age at distribution

years

Other ordinary income (W-2, SS, etc.)

10% penalty exception (if under 59½)

State income tax rate

IL/MS/PA/IA fully exempt retirement distributions. AK/FL/NV/SD/TN/TX/WA/WY have no state income tax.

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How to use

1 Choose account type: Traditional 401(k), Traditional IRA, Roth 401(k), Roth IRA, or Pension. Each has different taxation.
2 Enter the distribution amount (before tax). For Roth IRA, also enter your total contributions (pretax_basis = recoverable tax-free first under ordering rules).
3 Enter your age at distribution. Under 59½ triggers 10% penalty unless an exception applies. For Roth: also confirm the 5-year holding period (account must have been open 5+ years AND you must be 59½ to be qualified).
4 Choose a SECURE 2.0 exception if applicable: First-time home buyer ($10K IRA), Birth/adoption ($5K), Federally-declared disaster ($22K), Terminal illness, SEPP (substantially equal payments), Medical >7.5% AGI, Qualified higher education.
5 Enter filing status, other ordinary income (Social Security + W-2 + pension) for bracket stacking, and state tax rate. Click Calculate to see taxable portion, federal tax, penalty, state tax, total, and net distribution.

2026 Retirement Distribution Tax — Rules by Account

Account Type	Tax on Distribution	Early Withdrawal Penalty (under 59½)
Traditional 401(k) / 403(b) / 457(b)	100% taxable as ordinary income	10% penalty unless exception
Traditional IRA	100% taxable (unless after-tax basis)	10% penalty unless exception
Roth 401(k) — qualified	Tax-free (5-yr + age 59½)	None
Roth 401(k) — non-qualified	Earnings taxable + 10% penalty (pro-rata)	10% on earnings portion
Roth IRA — qualified	Tax-free (5-yr + age 59½)	None
Roth IRA — non-qualified	Contributions out tax-free first; earnings taxable	10% on earnings portion only
Pension (qualified plan)	Taxable as ordinary income	10% if before 59½ (or 55 with separation from service)

SECURE 2.0 Act — 10% Penalty Exceptions

The SECURE 2.0 Act (December 2022) added several major new exceptions to the §72(t) 10% early withdrawal penalty:

Exception	Limit	Notes
Federally Declared Disaster	$22,000 lifetime	SECURE 2.0 §331; spread tax over 3 years; repayable in 3 years
Birth or Adoption	$5,000 per parent per child	Each spouse can claim from own account; repayable in 3 years
Terminal Illness	Full distribution	SECURE 2.0 §326; physician certification required
Domestic Abuse	$10,000 or 50% of account	SECURE 2.0 §314; lesser of (effective 2024+)
Emergency Personal Expense	$1,000/year	SECURE 2.0 §115; 1 per 3 years unless repaid
Long-Term Care Insurance Premiums	Up to $2,500/yr (eff 2026)	SECURE 2.0 §334
Substantially Equal Periodic Payments (SEPP)	No limit	§72(t)(2)(A)(iv); 5-year or until 59½ commitment
Higher Education (IRA only)	Tuition + fees + R&B	§72(t)(2)(E); for self/spouse/children/grandchildren
First-Time Home Buyer (IRA only)	$10,000 lifetime	§72(t)(2)(F); for self or family member
Medical Expenses	>7.5% AGI	§72(t)(2)(B); same threshold as Schedule A
Health Insurance (after job loss)	No limit	§72(t)(2)(D); only if collected unemployment 12+ weeks
Disability	No limit	§72(t)(2)(A)(iii); permanent and total disability required

Roth Qualified Distribution — The Holy Grail

A qualified Roth distribution is entirely tax-free — no income tax, no penalty, no NIIT. Two requirements (BOTH must be met):

Test 1: 5-Year Rule	Test 2: Triggering Event
Account open 5+ tax years	Age 59½, OR
Each Roth conversion has its OWN 5-yr clock	Death, OR
Counts from January 1 of year of first contribution	Permanent disability, OR
Resets if account fully closed and reopened	$10,000 first-time home buyer

Required Minimum Distribution (RMD) Age in 2026

SECURE 2.0 raised the RMD start age from 72 to 73 (born 1951-1959) and 75 (born 1960+). Missing an RMD triggers a 25% excise tax (down from 50%, reduced to 10% if corrected within 2 years). Roth IRA owners have NO RMD requirement during their lifetime; Roth 401(k) RMDs were eliminated by SECURE 2.0 starting 2024.

FAQ

Q How is a 401(k) withdrawal taxed in 2026?

Traditional 401(k) distributions are 100% taxable as ordinary income at your marginal bracket (10-37% federal). Add 10% IRS early-withdrawal penalty if you're under 59½ unless you qualify for a §72(t) exception. State income tax also applies (0-13% depending on state).

Q When can I withdraw from my IRA without penalty?

At age 59½ — full access without penalty (still pay income tax on traditional IRA). Earlier withdrawals trigger the 10% §72(t) penalty UNLESS you qualify for an exception: SECURE 2.0 added disaster ($22K), birth/adoption ($5K), terminal illness, $10K first-time home, qualified higher education, medical >7.5% AGI, SEPP, disability.

Q How is a Roth IRA withdrawal taxed?

Tax-free if QUALIFIED (account 5+ years AND you're 59½+). If non-qualified: contributions come out tax-free first (basis recovery ordering rule), then conversions, then earnings. Earnings are taxed + 10% penalty if under 59½. Each Roth conversion has its own 5-year clock.

Q What is the 5-year rule for Roth?

Two separate 5-year rules. (1) Roth IRA account must be open 5+ tax years for earnings to come out tax-free. (2) Each Roth conversion has its own 5-year clock — converted funds taxed/penalized if withdrawn before 5 years (penalty only — already-taxed conversions never re-taxed).

Q What is the SECURE 2.0 disaster exception?

SECURE 2.0 §331 — up to $22,000 lifetime per federally-declared disaster, withdrawn from any retirement account, no 10% penalty. You can spread the income tax over 3 years OR repay the distribution within 3 years and recover the taxes paid. Major upgrade from prior $100K disaster relief.

Q When do I have to start RMDs?

SECURE 2.0 raised the RMD age. Born 1951-1959 → RMDs start at age 73. Born 1960 or later → RMDs start at age 75. First RMD can be delayed to April 1 of the year AFTER you turn 73/75, but you'll then take 2 RMDs that year. Roth IRAs have NO lifetime RMDs; Roth 401(k) RMDs eliminated 2024.

Q What is a SEPP / 72(t) plan?

Substantially Equal Periodic Payments (IRC §72(t)(2)(A)(iv)) — a way to access retirement money penalty-free before 59½. Calculate annual payment using IRS-approved methods (RMD, fixed amortization, fixed annuitization), then commit to taking it for 5 years OR until 59½ (whichever is longer). Modify before commitment ends → all past penalties reinstated retroactively.

Q Should I do a Roth conversion before retirement?

Often yes if you expect higher tax brackets later. Convert traditional IRA to Roth in low-income years (right after retirement, before Social Security and RMDs start). Pay tax now at current rate; future growth and qualified withdrawals are tax-free. Watch IRMAA Medicare surcharges and the 5-year clock on each conversion.