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Question

If I took money from my 401k for catholic school tuition, why do i have to pay a penalty?

Forum|Forum|4 years ago
February 25, 2022
1 reply
0 views

My 401k plan only allows for certain circumstances and school tuition was one of the options. So why do I have to pay a penalty on the withdrawl

TurboTax Deluxe Online

Employee

Distributions for an education expense are not an exception to the 10% early withdrawal penalty from a 401(k).

Go to this IRS Tax Topic for Additional Tax on Early Distributions From Retirement Plans Other Than IRAs - https://www.irs.gov/taxtopics/tc558

Employee

Using a distribution from your IRA for education qualifies for the penalty exception. But a distribution from your 401k does not.

Employee

And distributions permitted under the retirement plan itself do not necessarily receive the same treatment for tax purposes.