Question

Can I select Higher Education expense as Roth IRA withdrawal exception if I received financial aid which covered the entire tuition expense?

Forum|Forum|7 years ago
June 5, 2019
1 reply
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I opened a Roth IRA in 2017 and withdrew the funds a few months later into my bank account. Can I claim the higher education exception to avoid the 10% penalty if I received financial aid for graduate school covered and that financial aid covered my entire tuition?

TurboTax Premier Online

D

dmertz

Employee

No. You cannot use reimbursed expenses as an exception to the 10% early-distribution penalty.

Make sure that you are reporting your Roth IRA distribution correctly. You can withdraw your contributions from a Roth IRA at any time, tax and penalty free. Make sure that you have entered the Roth IRA contribution for 2017 under Deductions & Credits and have answered the follow-up questions so that TurboTax gives you credit on Form 8606 for the amount of the contributions that you made. Only an amount distributed that is beyond the amount of your contributions (i.e., earnings) will be taxable and subject to penalty.