Yes
Distributions that you roll over or transfer to another IRA or qualified retirement plan are not subject to this 10% additional tax. For more information on rollovers, refer to Topic 413. There are exceptions to this 10% additional tax for early distributions that are:  If your grandfather was younger than 70½ and his estate was listed as the beneficiary of the IRA, the estate must withdraw the entire balance within five years, which would be no later than 2013. Withdrawals by beneficiaries are not subject to the 10-percent penalty for early withdrawals prior to age 59½. The penalty is waived for inherited IRAs. Most IRAs have a designated beneficiary that is an individual, which precludes the need for a probate proceeding.  A. Distributions from an inherited IRA are never subject to the 10% early distribution penalty, regardless of the purpose for which the distribution amounts are used.  + More. If you withdraw money from your individual retirement account before age 59 1/2, you will generally have to pay a 10 percent early withdrawal penalty in addition to income tax on the amount withdrawn. Turn age 59 1/2. Once you turn age 59 1/2, you can withdraw any amount from your IRA without having to pay the 10 percent penalty. But regular income tax will still be due on each withdrawal. 4. Distributions from inherited IRAs are not subject to the 10% penalty. Distributions from inherited IRAs are not subject to the 10% early distribution penalty, regardless of the age of the beneficiary at the time the distribution occurs, Appleby said.  Generally, if the taxpayer receives distributions directly from the inherited IRA, the distributions are taxed, but the 10% penalty tax on premature withdrawals does not apply, even if the beneficiary is under the age of 59 1/2. Therefore, the money retained its character as an amount received by a beneficiary from an inherited IRA and the distribution was made to a beneficiary on account of a death. Thus the distribution was not subject to the 10% penalty tax. Distributions from Traditional IRAs prior to age 59½ are subject to a 10% penalty, in addition to applicable federal and state taxes. Under the following circumstances, you may be able to avoid the penalty on early withdrawals: 1  First-time home purchase. 2  Qualified education expenses. 3  Death or disability.  IRS Levy. The 10% penalty normally charged for an IRA withdrawal is waived for amounts withdrawn from your IRA as a result on an IRS levy. Note the exception does not apply if you voluntarily withdraw the amount from your IRA to pay the taxes owed in order to avoid the levy. 9. Medical Insurance. If you are unemployed, you may take penalty-free distributions from your IRA to pay for your medical insurance. In order for the distribution amount to be eligible for the penalty-free treatment, you must meet these certain conditions: 1  You lost your job. But there are a variety of ways to avoid the IRA early withdrawal penalty if you meet specific criteria: Turn age 59 1/2. Once you turn age 59 1/2, you can withdraw any amount from your IRA without having to pay the 10 percent penalty. But regular income tax will still be due on each withdrawal. IRA distributions are not required until after age 70 1/2. [Read: How to Save for Retirement on a Small Salary.].
https://www.irs.gov/taxtopics/tc557.html http://www.bankrate.com/finance/taxes/inherited-ira-withdrawals.aspx http://www.retirementdictionary.com/faqs/earlydistributioninheritedira http://money.usnews.com/money/retirement/articles/2013/09/23/11-ways-to-avoid-the-ira-early-withdrawal-penalty http://www.marketwatch.com/story/the-10-vital-rules-for-inherited-iras-2009-11-12 http://www.journalofaccountancy.com/issues/2007/feb/earlydistributionsfrominheritediras.html https://www.fidelity.com/retirement-planning/learn-about-iras/ira-withdrawal http://www.investopedia.com/articles/retirement/02/111202.asp http://money.usnews.com/money/retirement/articles/2013/09/23/11-ways-to-avoid-the-ira-early-withdrawal-penalty
are there inherited ira early withdrawal penalties