Similar to IRAs and other retirement plans, withdrawals from a SEP IRA are designed to begin at age 59 ½, subject only to ordinary income tax and not an early withdrawal penalty. If you make withdrawals prior to reaching age 59 ½, you’ll be subject to a 10% early withdrawal penalty in addition to ordinary income tax on the amount taken. There are certain exceptions to the early withdrawal penalty, such as distributions made for education or early termination from employment.