We withdrew from an IRA for college expenses. However, the Form 1099-R, Box 7, shows Code 1, reporting no exception applies. Is it possible to get a refund of the amount withheld?
While an early-distribution penalty does apply when using an IRA to pay student loans, there is no penalty when IRA distributions are used to pay for current educational expenses.
Simply report the early-distribution amount from the IRA used for college expenses on Form 5329. Enter the amount on Line 2 and enter exception number “08.” Any withdrawals in excess of education expenses will be subject to the penalty
Related Resources
The Taxpayer Advocate Service is contacting you about your IRS issue. Learn more about IRS letter 2903 with help from the tax experts at H&R Block.
Need help deciding if you need to file an amended return (IRS Form 1040X)? Get the facts from the tax experts at H&R Block.
Get the latest updates on the Protecting Americans from Tax Hikes Act. Learn how the PATH Act may affect your tax refund this year.
The IRS intends to terminate your installment agreement. Learn more about IRs letter 2975 and how to address it with help from the tax experts at H&R Block.
