Penalty exception for education

[1951twang]

Can I get penalty exception for education on early withdrawal of IRA funds if dependent child paid the tuition?

[Hal_Al]

Yes, as long as your dependent had qualifying expenses in the same year that you took the distribution.  

From Pub 970

"If your IRA distribution is equal to or less than your AQEE (adjusted qualified educational expenses), you aren't subject to the 10% additional tax."

"Don't reduce (adjust) the qualified education expenses by amounts paid with funds the student receives as:

• Payment for services, such as wages;

• A loan;

• A gift;

• An inheritance given to either the student or the individual making the withdrawal; or

• A withdrawal from personal savings (including savings from a qualified tuition program (QTP))."