Generally, if a taxpayer is under age 59-1/2 and withdraws assets (money or other property) from a qualified plan including Traditional IRAs, the taxpayer must pay a 10% additional tax, commonly referred to as a penalty (IRC Sec. 72(t)). This tax is 10% of the part of the distribution that the taxpayer was required to include in gross income for the year of the distribution.  Several exceptions provide relief from the early withdrawal penalty. See chapter 4.10.