My wife and I paid $10,000 this year for post secondary education tuition (Masters degree). Are we able to withdraw $10,000 from an IRA account penalty free this year to pay for those expenses? Thank

[Anonymous]

The IRS makes an exception for the 10% penalty if you are under the age of 59 1/2 if the funds are to be used for higher education expenses at an eligible educational institution for you, your spouse, or the children or grandchildren of you or your spouse.

According to the IRS (publication 590), qualified higher education expenses are tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a student at an eligible educational institution. They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. In addition, if the individual is at least a half-time student, room and board are qualified higher education expenses.

Eligible educational institution is any college, university, vocational school, or other post-secondary educational institution eligible to participate in the student aid programs administered by the Department of Education. It includes virtually all accredited, public, nonprofit, and proprietary (privately owned profit-making) post-secondary institutions. The educational institution should be able to tell you if it is an eligible educational institution.

[macuser_22]

"Are we able to withdraw $10,000 from an IRA account penalty free **this year** to pay for those expenses?"

What year did the education take place?

IRS Pub 590B states:

https://www.irs.gov/publications/p590b#en_US_2018_publink1000230919

[quote]

Higher education expenses.

Even if you are under age 59½, if you paid expenses for higher education during the year, part (or all) of any distribution may not be subject to the 10% additional tax. The part not subject to the tax generally is the amount that isn't more than the qualified higher education expenses (defined next) for the year for education furnished at an eligible educational institution (defined below). The education must be for you, your spouse,

or the children or grandchildren of you or your spouse.

[end quote]

That specifically says "during the year" and "for the year", not to repay yourself for previously paid education in a prior year.