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I read that I can withdraw up to $10,000 from my Simple IRA for the purchase or repair of my 1st home without having a penalty. Is this true, and how would I file this?

 
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Accepted Solutions
LindaA
Expert Alumni

I read that I can withdraw up to $10,000 from my Simple IRA for the purchase or repair of my 1st home without having a penalty. Is this true, and how would I file this?

Yes, if you are a qualified first-time homebuyer you don't have to pay the additional 10% or 25% tax on an early distribution from your SIMPLE IRA of up to $10,000 if you used the money to buy, build, or rebuild a first home. For more information, please see SIMPLE IRA Plan FAQs.

After you enter your 1099-R information in TurboTax (see instructions below) and continue through the interview, you'll be able to indicate the amount of your early SIMPLE IRA distribution you spent on your new home. (Click the screenshot below for reference.)


Note: This exception to the early distribution penalty does not apply to distributions from qualified plans, such as 401(k) plans. Please see IRS Retirement Topics - Exceptions to Tax on Early Distributions for reference.


To enter a 1099-R in TurboTax Online:

  • Open (continue) your return in TurboTax. (If your return isn't open, you'll need to sign in and click Take me to my return.)
  • Click My Account (top right of your screen).
  • Click Tools.
  • Click Topic Search.
  • In the search bar, type 1099-r.
  • In the results box, highlight 1099-r and click Go.
  • Follow the onscreen instructions. 

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3 Replies
LindaA
Expert Alumni

I read that I can withdraw up to $10,000 from my Simple IRA for the purchase or repair of my 1st home without having a penalty. Is this true, and how would I file this?

Yes, if you are a qualified first-time homebuyer you don't have to pay the additional 10% or 25% tax on an early distribution from your SIMPLE IRA of up to $10,000 if you used the money to buy, build, or rebuild a first home. For more information, please see SIMPLE IRA Plan FAQs.

After you enter your 1099-R information in TurboTax (see instructions below) and continue through the interview, you'll be able to indicate the amount of your early SIMPLE IRA distribution you spent on your new home. (Click the screenshot below for reference.)


Note: This exception to the early distribution penalty does not apply to distributions from qualified plans, such as 401(k) plans. Please see IRS Retirement Topics - Exceptions to Tax on Early Distributions for reference.


To enter a 1099-R in TurboTax Online:

  • Open (continue) your return in TurboTax. (If your return isn't open, you'll need to sign in and click Take me to my return.)
  • Click My Account (top right of your screen).
  • Click Tools.
  • Click Topic Search.
  • In the search bar, type 1099-r.
  • In the results box, highlight 1099-r and click Go.
  • Follow the onscreen instructions. 

I read that I can withdraw up to $10,000 from my Simple IRA for the purchase or repair of my 1st home without having a penalty. Is this true, and how would I file this?

Thank you SO much!!!!!!
LindaA
Expert Alumni

I read that I can withdraw up to $10,000 from my Simple IRA for the purchase or repair of my 1st home without having a penalty. Is this true, and how would I file this?

You are very welcome.
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