Roth funds used for college expenses

[dvail2180]

Hello,

I entered my 1099-R information and do not find a box to check that it was used for higher education expenses.  Do I have to click on "forms" and enter it myself on form 5329?  Thank you!

Dan

[Opus 17 · Accepted solution]

Are you asking about a Roth IRA or a workplace plan like a 401k or 403b?

Withdrawals from a workplace plan are subject to a 10% penalty for early withdrawal, and Roth withdrawals may be subject to income tax if you are withdrawing earnings.  The penalty exception for education expenses only applies to IRAs, and workplace plans are not IRAs.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-o...

If you did withdraw from a Roth IRA, you always withdraw contributions first and earnings last.  Withdrawal of contributions is never taxed, so there is no point about asking about exceptions to the penalty.  If you were in a situation where you would be subject to tax or a penalty, there is a screen that comes up that says something like, "your withdrawal is taxable, let's see if you qualify for any special situations that will reduce your tax" and then you should see questions about various exceptions.  

[dvail2180]

Thank you for the clarification.  I used ROTH IRA funds for a child's college expenses.  If I understand you correctly, since the $$ I withdrew is within my contribution amount, it is not a taxable event.  Therefore, the form 5329 indicating use for higher education expenses is not required.  I was concerned about it being flagged by the IRS, but I should be ok?  Thanks for your help!

Dan