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
Get the facts from H&R Block about IRS revenue agents. If your audit letter is signed by a revenue agent, the audit is likely to be complex.
If you need to complete a W-9 tax form, you may be asking what it’s used for and why it’s needed. We explain the purpose and use of an IRS W-9 form.
Get the facts from H&R Block about the most common IRS penalties for filing and paying late and learn how to request penalty removal if you qualify.
Get the facts from H&R Block about IRS levies, which typically seize wages or funds from bank accounts to satisfy IRS tax debts.
