IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs)

Key takeaways
* Publication 590-B explains the tax rules for withdrawing money from any type of IRA (traditional, Roth, SEP, SIMPLE).
* It details when withdrawals are taxable, when required minimum distributions (RMDs) must be taken, and which distributions incur penalties or qualify for exceptions.
* Chapter 1 covers traditional IRAs; Chapter 2 covers Roth IRAs; Chapter 3 addresses certain disaster-related distributions.
* Publication 590-A covers contribution rules; Form 8606 is used to report nondeductible IRA contributions and certain distributions.

What Publication 590-B covers
* Tax treatment of distributions from traditional and Roth IRAs, including when distributions are taxable and when they are tax-free.
* Rules for required minimum distributions (RMDs) and worksheets for calculating them.
* Penalties for early withdrawals and the exceptions that allow penalty-free distributions.
* Special rules for disaster-related distributions and their repayment rules.
* Appendices with an RMD worksheet (Appendix A) and life expectancy tables (Appendix B).

Traditional vs. Roth IRAs (core differences)
* Traditional IRA: contributions are often pretax or tax-deductible; taxes are paid when money is withdrawn.
* Roth IRA: contributions are made with after-tax dollars; qualifying withdrawals in retirement are generally tax-free.

Required minimum distributions (RMDs)
* Publication 590-B explains when RMDs must begin, how to calculate them, and includes a worksheet and life expectancy tables needed for the calculation.
* Form 8606 is referenced for reporting distributions from nondeductible IRAs.

Penalties and common exceptions
* Early distributions from an IRA are generally subject to a 10% additional tax (early withdrawal penalty).
* For SIMPLE IRAs, the early withdrawal penalty can increase to 25% if distributions occur within the first two years of participation.
* Common exceptions to the 10% penalty include distributions for qualified higher education expenses and a first-time home purchase (subject to the IRS rules).
* Chapter 3 addresses permitted early withdrawals for qualified disaster-related purposes. Under the SECURE 2.0 Act, certain qualified disaster recovery distributions may be treated as income spread over three years and may be exempt from the early withdrawal penalty (the law also allows repayment of such distributions to an IRA to avoid tax consequences).

How to stay current
* The IRS publishes updates and legislative changes on its web page for Publication 590-B (search “About Publication 590-B” on IRS.gov). Check that page for developments enacted after a given edition was released.

Related IRS resources
* Publication 590-A — rules for contributions to IRAs.
* Publication 560 — retirement plans for small businesses.
* IRS pages and FAQs on IRAs for quick answers to common questions.

Bottom line
Publication 590-B is the IRS guide for the tax treatment of IRA distributions. It explains when withdrawals are taxable, when RMDs are required, the penalties for early withdrawals and their exceptions, and special rules such as disaster-related distributions. Use the publication’s chapters, worksheets, and appendices — and consult Form 8606 when applicable — to determine the correct tax treatment of IRA distributions.