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Level 1

IRA Early Withdrawal Qualified Education Expenses Room and Board

Hi,

I am a full-time graduate student and am planning on taking an early withdrawal from a traditional IRA to help pay bills.  In IRS publication 970 (Ch 9) there are qualified education expenses that the withdrawal can be used for to avoid the 10% early withdrawal penalty.  One such item is room and board, however, I do not live on campus or in a university affiliated complex, I just rent an apartment off-campus.  Can I count my rent as room and board?  I have not been able to find tax documentation outlining this and the people on the IRS helpline could not give me a definitive answer.  Thanks!

1 Best answer

Accepted Solutions
Level 12

IRA Early Withdrawal Qualified Education Expenses Room and Board

The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts.

  1. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.

  2. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.

You may need to contact the eligible educational institution for qualified room and board costs.

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5 Replies
Level 12

IRA Early Withdrawal Qualified Education Expenses Room and Board

The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts.

  1. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.

  2. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.

You may need to contact the eligible educational institution for qualified room and board costs.

View solution in original post

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Level 1

IRA Early Withdrawal Qualified Education Expenses Room and Board

Thank you for the reply.  So just to be clear, even if I am paying rent on a non-university apartment I can count this value up the two amounts you specified.?  For example, if I pay $800 amonth for rent but the university quotes living prices at $600, I would only count as a qualified higher education expense right?  Thanks again!

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Level 1

IRA Early Withdrawal Qualified Education Expenses Room and Board

*Correction: would only count $600 toward qualified higher education expenses

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Level 15
Level 15

IRA Early Withdrawal Qualified Education Expenses Room and Board

Yes, that is correct.

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Level 1

IRA Early Withdrawal Qualified Education Expenses Room and Board

Thanks!