The rules concerning distributions and withdrawals from SEPs are generally the same rules governing distributions from Traditional IRAs:

. Employees may withdraw their assets without penalty after reaching age 59½, although generally subject to federal tax.
. Withdrawals before age 59½ may be subject to a 10 percent tax penalty.
. The federal tax law requires you to begin receiving minimum distributions from your SEP-IRA no later than April 1 following the calendar year in which you reach age 70½.

Exceptions to this 10 percent penalty include qualified distributions for:

. Certain higher education expenses.
. Certain costs incurred by a qualified first-time homebuyer.
. Certain medical expenses or medical insurance costs.
. Certain disabilities.
. Certain IRS levies.
. Payments to your designated beneficiaries or your estate because of your death.
. Substantially equal periodic payments over your life expectancy or joint life expectancy of you and your beneficiary.