I took early money out of a IRA for children's College Education. I have a 1099-R. I do not see the education tax break on the money in Turbo Tax?

[toddjohnson007]

Where do I state the money I took out of my IRA 1099-R is for Education use for the tax break?

[Hal_Al]

The only tax break for using an IRA for education is that the 10% early (before age 59.5) is waived.  The distribution is still subject to income tax. 

If Box 7 says "1"and not "2" the penalty exception is still allowed for education expenses. If you meet that requirement, you can ask the bank to issue a revised 1099-R showing code 2. But Turbo Tax can still do what you need without a revised 1099-R. Carefully go through the screens.  and TT will ask if the distribution is subject to the early withdrawal penalty.  Answer Yes (not no).  A few screens later, you'll get a screen "Did you use your IRA to pay for any of these expenses".  Enter the amount you used in the  "Higher Education" box.  That will cause TT to generate form 5329 to claim the penalty exception. 

[KrisD15]

You will enter the 1099-R after which there will be follow-up questions concerning what was done with those funds. 

You will finally get to a screen that asks "Did you use your IRA to pay for any of these expenses?" and the fifth one down is "Higher Education".

The distribution will show as taxable income on your 1040 line 4b, but will not include the penalty tax which would be listed on Schedule 2. 

Be sure that you do not use the education expenses you paid with the IRA distribution towards an education credit. 

According to the IRS:

"Qualified education expenses. For purposes of the 10% additional tax, these expenses are tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. In addition, if the student is at least a half-time student, room and board are qualified education expenses. The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts. 1. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 2. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. You may need to contact the eligible educational institution for qualified room and board costs."

IRS PUB 970