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Took money out of 401 to help with college tuition.

 
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1 Reply
MargaretL
Expert Alumni

Took money out of 401 to help with college tuition.

You may have to pay additional tax, on the distribution and additional 10% penalty tax if it is taken early... Money taken out prematurely (before you reach age 59 and 1/2) out of 401K is subject to additional penalty tax and college tuition is not an exception to the penalty, unfortunately. 

Please follow below steps to enter your distribution and answer follow-up questions; the program will help you determine the total tax on it.

  1. Federal Taxes
  2. Wages and Income
  3. Scroll down to Retirement Plans and Social Security
  4. Select IRA, 401(k), Pension Plans (1099-R)

Please refer to below link for a list of exceptions:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...

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