I want to use distributions from my Individual Retirement Account (IRA) to pay student loans. I am not yet age 59 Â½. Will I owe a tax penalty for taking an early withdrawal from my IRA even if Iâ€™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.
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