Hi! Is there a tax exemption for early retirement withdrawal (10-99-R) if we used it to buy a house?

[Rachel_W · Accepted solution]

Yes, there is an exception to the Early 10% Withdrawal Penalty for withdrawal's from IRA accounts for First-Time Home Purchases (no home ownership in prior two years).  This exception has a lifetime limitation of $10,000 per taxpayer.   You will need to file Form 5329 to take the exception.  

Keep in mind, even f you meet the qualifications to waive the 10% Penalty, the withdrawal is still included in your taxable income for the year.

Check out the TurboTax FAQ below for more details:

https://ttlc.intuit.com/replies/3301632