The IRS allows you to withdraw money from a Roth IRA to buy a first-time home without paying tax and the early withdrawal penalty.
Check these items:
- Is the code in Box 7 of your 1099-R "J"?
- Did you see the screen Did you use the money you withdrew to buy our first home?
- Did you enter $9,400?
- Did you have a Roth IRA before 2017?
Even if you are under age 59½, you don't have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.
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It must be used to pay qualified acquisition costs before the close of the 120th day after the day you received it.
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It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined below) who is any of the following.
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Yourself.
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Your spouse.
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Your or your spouse's child.
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Your or your spouse's grandchild.
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Your or your spouse's parent or other ancestor.
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When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions can't be more than $10,000.
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