f your COBRA premiums were paid out-of-pocket, they are a medical
expense that you can deduct as an itemized personal deduction on
Schedule A, subject to the 10% threshold on medical expenses. In addition, you will not have to pay the 10% early withdrawal penalty on the IRA distributions that were used to pay these premiums. You still have to pay regular income tax on the IRA distribution, regardless of how the funds are used.
