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annarubin1945
New Member

This year I cashed out and IRA because I needed money for a down payment on an automobile. Can I qualify for a credit?

The IRA came from money saved with a 401
1 Best answer

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xmasbaby0
Level 15

This year I cashed out and IRA because I needed money for a down payment on an automobile. Can I qualify for a credit?

"This year?"   Do you mean 2018 or 2019?   No, there is not a credit for that.  You will be paying tax for that.  If you are younger than 59 1/2 there is a 10% early withdrawal penalty and you also pay ordinary income tax on that money.

If you have not yet received it, watch for a 1099R soon.  It must be entered on your tax return.  If you meant you took the money out in 2019, you will have to enter it on your 2019 return next year.

Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.


**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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1 Reply
xmasbaby0
Level 15

This year I cashed out and IRA because I needed money for a down payment on an automobile. Can I qualify for a credit?

"This year?"   Do you mean 2018 or 2019?   No, there is not a credit for that.  You will be paying tax for that.  If you are younger than 59 1/2 there is a 10% early withdrawal penalty and you also pay ordinary income tax on that money.

If you have not yet received it, watch for a 1099R soon.  It must be entered on your tax return.  If you meant you took the money out in 2019, you will have to enter it on your 2019 return next year.

Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.


**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

View solution in original post

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