I am working on my Granddauthers taxes. She only earned $3,625 due to various illnesses. She had to withdraw money from her IRA. Is there a way to avoid the early withdrawal penalty?

[KatrinaB48 · Accepted solution]

Once your granddaughter enters her 1099-R information, the program will prompt her with questions to determine if she qualifies for an exception. Please view the list of possible exceptions to the 10% early withdrawal penalty (IRA) below:

• Death or total and permanent disability
• Series of substantially equal periodic payments based on life expectancy
• Qualified first-time homebuyer distributions up to $10,000
• Qualified higher-education expenses
• Certain medical insurance premiums paid while unemployed
• Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
• IRS levy
• Certain distributions to qualified military reservists called to active duty