10% Early withdrawal penalty relief.

Yes, the 10% penalty does not apply for the TPs deductible medical expenses. If the total distribution is $10,000 for $10,000 of expenses, and the AGI is $100,000, the total deductible expenses are $2,500, so the penalty is only $750($10% on the other $7,500, the so-called 7.5% floor).

There is a relief provision to the extent of the deductable medical expenses as AccountantMan pointed out. So if the deductable medical expenses after the 7.5% floor are $2,500 the penalty relief would be $250.00 meaning that the penalty would then be $750 instead of $`1,000 on a $10,000 distribution

Couldn't have said it better myself, MJ.

Thats why I gave you points,