Question

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?

Answer

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 Topics

Related Resources

No Joke: Tax Filing Deadline is April 18

Did you know that the 2017 tax filing deadline is April 18th? Learn more with the tax experts at H&R Block.

IRS Notice CP87B – Verify You are Not Someone’s Dependent

Learn about IRS Notice CP87B, why you received it, and how to verify a dependent on your tax return. Get tax help from the tax experts at H&R Block.

Unfiled Tax Return

Learn what happens when you have unfiled tax returns and how to fix the issue. Get the IRS definition and more insight from the experts at H&R Block.

Missing 1099s Forms

Learn what to do if you are missing 1099s forms from your employers with help from the tax experts at H&R Block.