I want to use distributions from my Individual Retirement Account (IRA) to pay student loans. I am not yet age 59 ½. Will I owe a tax penalty for taking an early withdrawal from my IRA even if I’m using the distribution to pay student loans?
Yes, an early-distribution penalty will apply when using an IRA to pay student loans . You must pay the 10% additional tax on the portion of your IRAs you withdrew to pay student loans. An exception to the penalty applies to IRA distributions used to pay for current educational expenses.
Related Resources
Learn how to find your tax extension confirmation number with help from the tax experts at H&R Block.
Learn more about letter 105C and how to handle an IRS 105C letter with help from the tax experts at H&R Block.
Learn about IRS Notice CP87A, why you received it, and how to resolve a dependent discrepancy. Get tax help from the tax experts at H&R Block.
Learn about the consequences you can face if you lie on your tax return. Get the facts from the tax experts at H&R Block.
