Yes, withdrawals from a 401(k) are taxable and do count as income to determine whether you are or not above the MAGI limit for education credits.
MAGI for most people is the amount of AGI,
adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line
22 and is the same as MAGI. If you file Form 1040, AGI is on line 38 and you
add back the following:
- Foreign earned income
exclusion,
- Foreign housing exclusion,
- Foreign housing deduction,
- Income excluded as bona fide
residents of American Samoa or of Puerto Rico.
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