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New Member
posted Jun 6, 2019 2:37:30 AM

I withdrew from my 401k to pay for my daughter's college tuition. Is this helpful in deductions?

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1 Best answer
New Member
Jun 6, 2019 2:37:32 AM

Unfortunately, there's no exception to the early distribution penalty on a 401(k) to pay for higher education expenses. That exception is only for money withdrawn from an IRA.

So if you took an early distribution (1099-R box 7 code 1), you'll get hit with the 10% penalty.  But if you were at least age 59 1/2 during 2016, then the early distribution penalty would not apply.

Assuming she is your dependent, you may still qualify for an education benefit for qualified education expenses paid for her schooling.  Here's a link to IRS Publication 970 discussing the various benefits and their requirements: https://www.irs.gov/pub/irs-pdf/p970.pdf

1 Replies
New Member
Jun 6, 2019 2:37:32 AM

Unfortunately, there's no exception to the early distribution penalty on a 401(k) to pay for higher education expenses. That exception is only for money withdrawn from an IRA.

So if you took an early distribution (1099-R box 7 code 1), you'll get hit with the 10% penalty.  But if you were at least age 59 1/2 during 2016, then the early distribution penalty would not apply.

Assuming she is your dependent, you may still qualify for an education benefit for qualified education expenses paid for her schooling.  Here's a link to IRS Publication 970 discussing the various benefits and their requirements: https://www.irs.gov/pub/irs-pdf/p970.pdf