Q. Assuming the 5-Year rule, when can payments be modified? 

A. Revenue Ruling 2002-62 states that if a SEPP is “modified (other than by reason of death or disability) within a 5-year period beginning on the date of the first payment”, the 10% penalty (plus interest) will apply. In other words, 5 years is calculated from the date of the first payment to exactly 5 years after the first payment, regardless of when your last distribution took place.