Paid Cobra Payments June 2017- February of 2018 every Month, For Early IRA Withdrawal in 2018 without penalty . Can I include the amount in 2017 or Just 2018 Premiums ?

[uswmnb05]

I did not make any Withdrawals in 2017 from my IRA . I am 53 so I can only make withdrawals for Premiums amounts for Health insurance. But Ia m not sure if I can include the Premiums paid last year since the tax code says "you can make the withdrawals in the first year or subsequent year" Please Calirify

[dmertz · Accepted solution]

Any distribution you received from the IRA in 2018 is reportable on your 2018 tax return, not your 2017 tax return.

As for the penalty exceptions, the medical-expense penalty exception applies to the portion of your medical expenses [paid in 2018], including the COBRA payments, that exceed 7.5% of your AGI.

The penalty exception for the portion of insurance payments [paid in 2018] not in excess of 7.5% of your AGI applies only if all of the following conditions apply.

• You lost your job.
• You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.
• You receive the distributions during either the year you received the unemployment compensation or the following year
• You receive the distributions no later than 60 days after you have been reemployed.

https://www.irs.gov/publications/p590b#en_US_2016_publink1000230912

[dmertz]

Only the insurance payments made in 2018 can be applied to the 2018 distribution to reduce or eliminate the penalty since these are the only payments that are includible on line 1 of your 2018 Schedule A.  I've added that in [ ] to my answer.

[uswmnb05]

Ok great that Answers my question and I confirmed on 590-B:

Medical insurance. Even if you are under age 59/2, "you
may not have to pay the 10% additional tax on distributions
during the year that are not more than the amount
you paid during the year for medical insurance for yourself,
your spouse, and your dependents." You will not have
to pay the tax on these amounts if all of the following conditions
apply.
You lost your job.
You received unemployment compensation paid under
any federal or state law for 12 consecutive weeks
because you lost your job.
You receive the distributions during either the year
you received the unemployment compensation or the
following year.
You receive the distributions no later than 60 days after
you have been reemployed.