It depends, if you qualify to be a first-time homebuyer and you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home. If you are married, your spouse must also meet this no-ownership requirement. Please see IRS First home for more details. If you qualify then you do not have to pay the 10 % early withdrawal penalty on up to $10,000 (if you are under 59 1/2).
Please be aware, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. Only the earnings will be taxable. Please answer all follow-up questions carefully and make sure to enter net contributions prior to 2021 on the "Enter Prior Year Roth IRA Contributions" screen.
If you withdrew earnings and qualify as first-time homebuyer then please follow these steps:
- Login to your TurboTax Account
- Click on the "Search" on the top and type “1099-R”
- Click on “Jump to 1099-R” and enter your 1099-R
- Click "continue" after all 1099-R are entered and answer all the questions.
- Continue until "Did you use your IRA to pay for any of these expenses?" screen (this screen won't come up if you only withdrew your contributions) and enter the amount under First Home purchase (up to $10,000).
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