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
Learn more about notice CP15, why you received it, and how to handle the notice with help from the tax experts at H&R Block.
Learn about the types of IRS transcripts and how you can use them to view information about your IRS account, income sources, and tax return history.
Did you receive IRS Letter 3289? Learn more about letter 3289 and how to handle it with help from the tax experts at H&R Block.