72(t) SEPP calculator

Statements on this page and their sources

Each sentence below states a fact the calculator does not compute. It was checked against the document named, most recently on 2026-09-12; the date is when to re-read it.

• A series of substantially equal periodic payments from an IRA or an employer plan escapes the 10% additional tax on distributions before 59½, if the amount is determined under one of the three methods in Notice 2022-6 and is then left alone.
  • 26 U.S.C. §72(t)(1) — the 10% additional tax the exception displaces — If any taxpayer receives any amount from a qualified retirement plan (as defined in section 4974(c)), the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.
  • 26 U.S.C. §72(t)(2)(A)(iv) — the exception itself — part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of such employee and his designated beneficiary,
  • IRS Notice 2022-6 §3.01 — Payments in a series are considered substantially equal periodic payments within the meaning of section 72(t)(2)(A)(iv) if they are determined in accordance with one of the three methods described in section 3.01(a) through (c) of this notice (which are based on the three methods described in Rev. Rul. 2002-62).
  • IRS Notice 2022-6 §3.02(f) — Distributions from an IRA. In the case of distributions from an IRA, the IRA owner is treated as an employee for purposes of applying this notice.
  Checked 2026-09-12.
• The calculator uses the life-expectancy tables and mortality rates in force since 2022: the 2020 final regulations under §401(a)(9) apply to distribution years beginning on or after 1 January 2022, and Notice 2022-6 governs any series commencing on or after 1 January 2023.
  • IRS Notice 2022-6 §2.09 (background, stating when the current tables took effect) — Final regulations under section 401(a)(9) issued in 2020 provide new life expectancy tables for determining required minimum distributions that apply for distribution calendar years beginning on or after January 1, 2022.
  • IRS Notice 2022-6 §4 — The guidance in this notice replaces the guidance in Rev. Rul. 2002-62 and Notice 2004-15 for any series of payments commencing on or after January 1, 2023, and it may be used for a series of payments commencing in 2022.
  Checked 2026-09-12.
• Required minimum distribution method: each year's payment is that year's account balance divided by the number of years from the chosen table for that year, and the yearly redetermination is not a modification so long as the method and the table stay the same.
  • IRS Notice 2022-6 §3.01(a) — The required minimum distribution method. The annual payment for each distribution year is determined by dividing the account balance for that distribution year by the number of years from the chosen life expectancy table in section 3.02(a) of this notice for that distribution year. Under this method, the account balance, the number of years from the chosen life expectancy table, and the resulting annual payments are redetermined for each distribution year. This redetermination of the annual payment is not considered a modification of the series of substantially equal periodic payments, provided that the required minimum distribution method continues to be used and the same life expectancy tables continue to be used, except to the extent required in section 3.02(b) of this notice.
  Checked 2026-09-12.
• Fixed amortization method: the payment is the level amortization of the account balance over the number of years from the chosen table for the first distribution year at a permitted interest rate, and is the same amount in every later year; the factor is the present value of $1 a year payable at the end of each year.
  • IRS Notice 2022-6 §3.01(b) — The fixed amortization method. The annual payment for each distribution year is determined as the amount that will result in the level amortization of the account balance over a specified number of years determined using the chosen life expectancy table under section 3.02(a) of this notice and an interest rate that is permitted pursuant to section 3.02(c) of this notice. Under this method, once the account balance, the number of years from the chosen life expectancy table, and the resulting annual payment are determined for the first distribution year, the annual payment is the same amount in each succeeding distribution year.
  • IRS, Substantially equal periodic payments, Q&A 7, example 2 — the only statement that the payments fall at the end of each year — This number was computed as the present value factor of $1.00 per year payable at the end of each year for 36.2 years using an interest rate of 4.0%.
  Checked 2026-09-12.
• Fixed annuitization method: the payment is the account balance divided by an annuity factor — the present value of $1 a year for the owner's life (or the joint lives of owner and designated beneficiary) — built from the mortality rates in Treas. Reg. §1.401(a)(9)-9(e) at a permitted interest rate, and is the same amount in every later year.
  • IRS Notice 2022-6 §3.01(c) — The fixed annuitization method. The annual payment for each distribution year is determined by dividing the account balance by an annuity factor that is the present value of an annuity of $1 per year beginning at the employee's age and continuing for the life of the employee (or the joint lives of the employee and designated beneficiary). The annuity factor is derived using the mortality rates in § 1.401(a)(9)-9(e) and an interest rate that is permitted pursuant to section 3.02(c) of this notice. Under this method, once the account balance, the annuity factor, and the resulting annual payment are determined for the first distribution year, the annual payment is the same amount in each succeeding distribution year.
  • Treas. Reg. §1.401(a)(9)-9(e) — the mortality rates the annuity factor is built from — (e) Mortality rates. The following are the mortality rates used to calculate the tables set forth in paragraphs (b), (c), and (d) of this section.
  Checked 2026-09-12.
• The IRS's worked example — a 50-year-old with a $400,000 IRA, a 4% rate and his own life expectancy — is $11,050 under the RMD method (36.2 years), $21,102 under fixed amortization (factor 18.9559) and $22,030 under fixed annuitization (factor 18.1568). The calculator reproduces all three.
  • IRS, Substantially equal periodic payments, Q&A 7, facts — Bob, who turns age 50 on his birthday in 2023, is the owner of an IRA from which he would like to start taking distributions beginning in 2023. He would like to avoid the Section 72(t) 10% additional tax imposed on early distributions by taking advantage of the SoSEPP exception. Bob’s IRA account balance is $400,000 as of December 31, 2022 (the last valuation date prior to the first payment) … For the fixed amortization and fixed annuitization methods, Bob chooses to use a rate of 4%, which is not greater than the 5% limit specified in Q&A 4. Bob chooses to determine his SoSEPP over his own life expectancy only.
  • IRS, Substantially equal periodic payments, Q&A 7, example 1 (RMD method) — Bob calculates his first annual amount by dividing the account balance ($400,000) by the single life expectancy (36.2) obtained from the Single Life Table, using attained age 50 ($400,000/36.2 = $11,050).
  • IRS, Substantially equal periodic payments, Q&A 7, example 2 (fixed amortization) — An amortization factor based on 36.2 years and the selected interest rate of 4.0% is equal to 18.9559. … Thus, the annual amount for each year is $400,000 divided by 18.9559, or $21,102.
  • IRS, Substantially equal periodic payments, Q&A 7, example 3 (fixed annuitization) — The annuity factor computed is 18.1568. … Thus, the annual amount for each year is $400,000 divided by 18.1568, or $22,030.
  Checked 2026-09-12.
• The permitted tables are the Uniform Lifetime Table in Appendix A of Notice 2022-6, the Single Life Table in Treas. Reg. §1.401(a)(9)-9(b) and the Joint and Last Survivor Table in §1.401(a)(9)-9(d), which may be used even when the beneficiary is not the spouse; under the RMD method the table used in the first distribution year must be used in every later one.
  • IRS Notice 2022-6 §3.02(a) — Life expectancy tables. The life expectancy tables that can be used to determine distribution periods under the required minimum distribution and fixed amortization methods are: (1) the Uniform Lifetime Table in Appendix A of this notice; (2) the Single Life Table in § 1.401(a)(9)-9(b); or (3) the Joint and Last Survivor Table in § 1.401(a)(9)-9(d) (which can be used even if the designated beneficiary is not the spouse). … In the case of the required minimum distribution method, except as provided section 3.02(b) or section 4 of this notice, the same life expectancy table that is used for the first distribution year must be used in each following distribution year.
  Checked 2026-09-12.
• The Notice extends the Uniform Lifetime Table down to age 10 for this purpose; the table in the regulation begins at 72.
  • IRS Notice 2022-6, Appendix A, first row — Appendix A to Notice 2022-6 Uniform Lifetime Table Taxpayer's Age Life Expectancy 10 88.2
  • Treas. Reg. §1.401(a)(9)-9(c), Table 2 — its first row is age 72 — Table 2 to Paragraph (c) Age of employee | Applicable denominator | 72 | 27.4
  Checked 2026-09-12.
• A 72(t) series may use any interest rate up to the greater of 5% and 120% of the federal mid-term rate for either of the two months immediately before the month the distribution begins.
  • IRS Notice 2022-6 §3.02(c) — The interest rate that may be used to apply the fixed amortization method or the fixed annuitization method is any interest rate that is not more than the greater of (i) 5% or (ii) 120% of the federal mid-term rate (determined in accordance with section 1274(d) for either of the two months immediately preceding the month in which the distribution begins).
  • IRS, Substantially equal periodic payments, Q&A 4 — The taxpayer must select an interest rate that is not more than the greater of: 5%; or 120% of the federal mid-term rate published in IRS Revenue Rulings (applicable federal rates) for either of the two months immediately preceding the month in which the first payment of the SoSEPP is made.
  Checked 2026-09-12.
• The rates are published monthly in an IRS revenue ruling, which prints the 120% mid-term rate for annual, semiannual, quarterly and monthly compounding; Notice 2022-6 sets the ceiling without naming a compounding period, and this calculator uses the annual figure.
  • IRS Notice 2022-6 §3.02(c), which names no compounding period — The interest rate that may be used to apply the fixed amortization method or the fixed annuitization method is any interest rate that is not more than the greater of (i) 5% or (ii) 120% of the federal mid-term rate (determined in accordance with section 1274(d) for either of the two months immediately preceding the month in which the distribution begins). The revenue rulings that include the section 1274(d) federal mid-term rates may be found at https://apps.irs.gov/app/picklist/list/federalRates.html.
  • Rev. Rul. 2022-9, Table 1 (May 2022), whose mid-term block prints one 120% AFR per compounding period and where the four differ — Applicable Federal Rates (AFR) for May 2022 Period for Compounding Annual Semiannual Quarterly Monthly … Mid-term … 120% AFR 3.01% 2.99% 2.98% 2.97%
  Checked 2026-09-12.
• For the two fixed methods any account balance from December 31 of the prior year through the date of the first distribution is treated as reasonable; the RMD method takes the balance under Treas. Reg. §1.401(a)(9)-5, in practice the prior December 31 balance.
  • IRS Notice 2022-6 §3.02(d) — Account balance. For purposes of applying the required minimum distribution method, the account balance for a distribution year is determined under § 1.401(a)(9)-5. For the fixed amortization and fixed annuitization methods, the account balance must be determined in a reasonable manner based on the facts and circumstances. The account balance will be treated as determined in a reasonable manner if it is the account balance on any date within the period that begins on December 31 of the year prior to the date of the first distribution and ends on the date of the first distribution.
  • IRS, Substantially equal periodic payments, Q&A 6 — For purposes of applying the RMD method, the account balance is determined in accordance with the rules under Section 1.401(a)(9)-5, Q&A-3, and is generally equal to the account balance as of the end of the prior calendar year.
  Checked 2026-09-12.
• The series must run until the later of five years after the first payment and the day the owner reaches 59½. A modification before then adds to the tax for that year the 10% additional tax that would have been imposed on every earlier payment, plus interest for the deferral period.
  • 26 U.S.C. §72(t)(4)(A) — (ii) the series of payments under such paragraph are subsequently modified (other than by reason of death or disability or a distribution to which paragraph (10) applies)— (I) before the close of the 5-year period beginning with the date of the first payment and after the employee attains age 59½, or (II) before the employee attains age 59½, the taxpayer’s tax for the 1st taxable year in which such modification occurs shall be increased by an amount, determined under regulations, equal to the tax which (but for paragraph (2)(A)(iv)) would have been imposed, plus interest for the deferral period.
  • IRS, Substantially equal periodic payments, Q&A 2 — The taxpayer does not modify the SoSEPP (other than by reason of death, disability, or distribution to a qualified public safety officer under Section 72(t)(10)) before the date that is the later of: The 5th anniversary of the date of the first SoSEPP payment; and The date the taxpayer reaches age 59 ½.
  • IRS, Substantially equal periodic payments, Q&A 9 — The taxpayer will also be subject to a recapture tax under Section 72(t)(4) equal to the total amount of the 10% additional tax that would have been imposed under Section 72(t)(1) for the prior years of the SoSEPP (as if the SoSEPP exception had not applied), plus interest for the deferral period.
  Checked 2026-09-12.
• After the first valuation date, adding to the account other than by investment experience, transferring part of the balance to another plan, or rolling over the amount received is a modification; so is taking any distribution from the account other than the series.
  • IRS Notice 2022-6 §3.02(e) — Changes to account balance. Under all three methods, substantially equal periodic payments are first calculated with respect to an account balance as of the first valuation date selected as described in section 3.02(d) of this notice. A modification to the series of payments will occur if, after such date, there is (1) any addition to the account balance other than by reason of investment experience, (2) any transfer of a portion of the account balance to another retirement plan, or (3) a rollover of the amount received by the employee.
  • IRS, Substantially equal periodic payments, Q&A 2 — the only statement that a further distribution from the account is itself a modification — Once the SoSEPP is established, the taxpayer cannot make any additions to the account, nor take any payments from the account, other than the SoSEPP payments. Changes to the account due to investment experience do not affect this prohibition against making additional contributions to the account or taking distributions from the account in addition to the annual payment under the SoSEPP.
  Checked 2026-09-12.
• 59½ is six calendar months after the 59th birthday: the IRS's example puts a taxpayer born 15 August 1968 at 59½ on 15 February 2028. No source names a rule for a day that does not exist in the target month; the calculator uses that month's last day.
  • IRS, Substantially equal periodic payments, Q&A 13 — the only document behind the six-month reading, and it says of itself that its answers “should not be cited as any type of legal authority” — For example, assume the taxpayer was born on August 15, 1968, and commenced taking SoSEPP payments on December 1, 2024, at age 56. The taxpayer may not take a distribution that is not part of the SoSEPP or modify the annual amount until December 1, 2029 (five full years after the date the SoSEPP commences), even though the taxpayer would reach age 59 ½ on February 15, 2028.
  Checked 2026-09-12.
• Notice 2022-6 §3.02(e) treats a transfer of part of the balance to another plan as a modification, while §72(t)(4)(C) — which applies to transfers, rollovers and exchanges after 31 December 2023 — says such a transfer is not one if the distributions from the two plans would in combination still satisfy the exception. The two documents differ.
  • IRS Notice 2022-6 §3.02(e) — A modification to the series of payments will occur if, after such date, there is … (2) any transfer of a portion of the account balance to another retirement plan, or (3) a rollover of the amount received by the employee.
  • 26 U.S.C. §72(t)(4)(C), added by SECURE 2.0 Act §323(a) — (iii) distributions from the transferor and transferee plans would in combination continue to satisfy the requirements of paragraph (2)(A)(iv) if they had been made only from the transferor plan, such transfer or rollover shall not be treated as a modification under subparagraph (A)(ii), and compliance with paragraph (2)(A)(iv) shall be determined on the basis of the combined distributions described in clause (iii).
  • SECURE 2.0 Act §323(e)(1) (Pub. L. 117-328, Div. T) — the effective date of that amendment, and nothing else — The amendments made by subsections (a), (b), and (c) shall apply to transfers, rollovers, and exchanges occurring after December 31, 2023.
  Checked 2026-09-12.
• A series begun under the fixed amortization or fixed annuitization method may be switched once, in any later distribution year, to the RMD method without that being a modification; any change after that one is a modification.
  • IRS Notice 2022-6 §3.03(b) — An individual who begins distributions using either the fixed amortization method or the fixed annuitization method is permitted in any subsequent distribution year to switch to the required minimum distribution method to determine the payment for the distribution year of the switch and all subsequent distribution years, and this change in method will not be treated as a modification within the meaning of section 72(t)(4). Once a change is made under this paragraph, any subsequent change from the required minimum distribution method will be a modification for purposes of section 72(t)(4).
  • IRS, Substantially equal periodic payments, Q&A 10 — The only permitted change in method is if the taxpayer changes from one of the fixed methods under Q&A 3 (either the fixed amortization method or the fixed annuitization method) to the RMD method. This change is available one time only and is not treated as a modification of the SoSEPP that causes the taxpayer’s distributions to fall under the additional recapture tax described in Q&A 9 above.
  Checked 2026-09-12.
• If following the method exhausts the account, the smaller final payment and the end of the series are not a modification and the recapture tax does not apply.
  • IRS Notice 2022-6 §3.03(a) — Complete depletion of assets. If, as a result of following a method of determining substantially equal periodic payments that qualifies for the exception of section 72(t)(2)(A)(iv), an individual's assets in an individual account plan or an IRA are exhausted, any resulting reduction in the amount of the final payment (and the subsequent cessation of payments) is not a modification within the meaning of section 72(t)(4). Accordingly, the recapture tax described in section 72(t)(4)(A) will not apply in this case.
  • IRS, Substantially equal periodic payments, Q&A 11 — Additionally, the recapture tax under Section 72(t)(4) does not apply. This is not considered to be a change in the method of determining the SoSEPP nor a modification of the SoSEPP.
  Checked 2026-09-12.
• The beneficiary used for the Joint and Last Survivor Table or for a joint annuitization must be the actual designated beneficiary, fixed as of January 1 of the distribution year; where there are several, the Notice's own example takes the older of a 25- and a 55-year-old. Under the RMD method a beneficiary eliminated or dead in a year drops out of later years, and with no designated beneficiary the Single Life Table applies.
  • IRS Notice 2022-6 §3.02(b) — then the beneficiary whose life expectancy or expected mortality is used must be the actual designated beneficiary of the employee with respect to the account for the year of the determination. If the employee has more than one beneficiary, the identity and age of the designated beneficiary used for purposes of each of the methods described in section 3.01 of this notice are determined under the rules for determining the designated beneficiary for purposes of section 401(a)(9). The designated beneficiary is determined for a distribution year as of January 1 of the distribution year, without regard to changes in the designated beneficiary later in that distribution year
  • IRS Notice 2022-6 §3.02(b), the example — and the beneficiaries on January 1, 2023 are 25 and 55 years old, the number of years used to calculate the payment for 2023 would be 40.2 (the entry from the Joint and Last Survivor Table for ages 50 and 55) … if the 55-year-old beneficiary is eliminated or dies in 2023, that individual would not be taken into account in future distribution years (and if there is no designated beneficiary in a future year, the Single Life Table in § 1.401(a)(9)-9(b) is used for that distribution year).
  • IRS, Substantially equal periodic payments, Q&A 5 — and the designated beneficiary dies or is eliminated (and there is no other designated beneficiary for a later year), then that individual is not taken into account for later years and the taxpayer must use the Single Life Table to determine the payment under the SoSEPP for that year.
  Checked 2026-09-12.
• The series is not treated as having commenced until the first payment is made, and it should commence within the calendar year the annual amount was determined for; the annual amount may be taken in annual, quarterly or monthly installments without adjusting it. The IRS FAQ is the only document that states either rule.
  • IRS, Substantially equal periodic payments, Q&A 7, note — Note: The SoSEPP is not considered to have commenced until the date the first payment is made to the taxpayer. The taxpayer should ensure that the SoSEPP commences within the calendar year for which the annual amount initially is determined.
  • IRS, Substantially equal periodic payments, Q&A 8 — the taxpayer may choose to take the annual amount in regular annual, quarterly, or monthly installments. The taxpayer does not need to adjust the original determination of the annual amount to reflect the planned frequency of payments within each year.
  Checked 2026-09-12.
• The exception removes only the 10% additional tax; the payments stay includible in gross income.
  • 26 U.S.C. §72(t)(2) — the exception switches off paragraph (1), the 10% additional tax, and nothing else — Except as provided in paragraphs (3) and (4), paragraph (1) shall not apply to any of the following distributions:
  • 26 U.S.C. §408(d)(1) — the separate rule that keeps the distribution in gross income — Except as otherwise provided in this subsection, any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72.
  • IRS, Substantially equal periodic payments, Q&A 1 — The 10% additional tax is determined with respect to that portion of the distribution that is includible in gross income.
  Checked 2026-09-12.
• Payments from a §401(a) trust or a §403(b) contract qualify only if the series begins after the employee separates from service; the limitation does not reach IRAs.
  • 26 U.S.C. §72(t)(3)(B), which names only §401(a) trusts and §72(e)(5)(D)(ii) contracts — Paragraph (2)(A)(iv) shall not apply to any amount paid from a trust described in section 401(a) which is exempt from tax under section 501(a) or from a contract described in section 72(e)(5)(D)(ii) unless the series of payments begins after the employee separates from service.
  • IRS, Substantially equal periodic payments, Q&A 2 — If these distributions are from any of the arrangements listed in items 1 through 3 of Q&A 1, the taxpayer must be separated from service with the employer maintaining the plan before the payments begin for this exception to apply. (This does not apply to IRAs or individual retirement annuities.)
  Checked 2026-09-12.
• Each series is determined for one account: the balances of several accounts may not be combined into one annual amount, and no account may have more than one series in effect for a year. The IRS FAQ is the only document that states this.
  • IRS, Substantially equal periodic payments, Q&A 6, note — Note: Each SoSEPP is determined for one single account. The taxpayer cannot combine account balances of multiple accounts to determine a combined annual SoSEPP amount. If the taxpayer has more than one account, the taxpayer may establish a separate SoSEPP from each account that the taxpayer wishes to use (consistent with the rules for each account); each SoSEPP should be managed independently.
  • IRS, Substantially equal periodic payments, Q&A 2 — The taxpayer cannot have more than one SoSEPP in effect for the account for any year.
  Checked 2026-09-12.