Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax. You will owe income tax on the gross amount you withdrawal. If you qualify for the first time home buyer exception, that only applies to the 10% early withdrawal penalty on the first $10K.
The first $10K that you take from your IRA as a qualified first time home buyer is exempt from the early withdrawal penalty (the extra 10%). Any amount over $10K, the 10% penalty will apply. The full amount will be subjected to ordinary income tax. If you are under 59 and you take $10K as a qualified first time homebuyer, you won't pay any penalty, but you will still owe the ordinary income tax, depending on your tax bracket, on the full $10k. If you take $15K, you owe income tax on the full amount and the additional 10% early withdrawal penalty on $5k.
Exception to 10% Additional Tax
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
