You can file an amended return to claim an exemption to the 10% IRA early withdrawal penalty.
You can exclude up to $10,000 of your early withdrawal from the penalty if you were a first-time homebuyer.
The IRS defines a first-time homebuyer as someone who had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse must also meet this no-ownership requirement.
You have up to 120 days from the date of distribution to acquire a home. The IRS defines acquisition as:
- Entering a binding contract to buy the main home for which the distribution is being used, or
- Building or rebuilding of the main home for which the distribution is being used begins.
You do not have to do anything with your 2021 taxes because all the withdrawals took place in 2020.
For more info see First Home.
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