topic Early IRA withdrawl for college in Retirement tax questions

Early IRA withdrawl for college

khatcher446 — Thu, 27 Feb 2025 21:47:34 GMT

How do you designate early IRA distribution for college tuition in desktop software? There is no Higher Education box available

Re: Early IRA withdrawl for college

ThomasM125 — Thu, 27 Feb 2025 21:56:36 GMT

The withdrawal has to be from an IRA for penalty relief for education expenses. It doesn't apply to 401-K withdrawals, so you need to indicate the withdrawal was from an IRA by checking that box on the Form 1099-R input if that applies to you.

Re: Early IRA withdrawl for college

khatcher446 — Thu, 27 Feb 2025 22:16:53 GMT

So, are you saying that if this retirement account is an employee sponsored 401-K it is not allowed to be used for college tuition? Just trying to waive the federal penalty fee. I understand that we have to pay taxes on it.

Thank you!

Re: Early IRA withdrawl for college

dmertz — Fri, 28 Feb 2025 00:38:02 GMT

"are you saying that if this retirement account is an employee sponsored 401-K it is not allowed to be used for college tuition?"

That is correct. This particular penalty exception only applies to distributions from IRAs. A 401(k) is not an IRA.

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

Re: Early IRA withdrawl for college

khatcher446 — Sat, 01 Mar 2025 16:54:37 GMT

Thank you