When I withdraw from my Roth IRA to pay for qualified college expenses for my dependent son, do I need to wire the money directly to the college?

Forum|Forum|1 year ago
August 17, 2024
1 reply
0 views

I anticipate I'll need to have form 5329 included (which I imagine Turbo Tax will fill in for me when I file in 2025). I'm just curious if I have to wire the money directly from my IRA account to the college in order to create "proof" for the IRS that the funds were used for qualified educational expenses, or can I wire it to my bank account and then pay the college from my bank account funds?

TurboTax Deluxe Online

Best answer by dmertz

There is no requirement as to how you pay the money for the education expenses, no need to directly transfer the funds. Just keep records of your payments. The only requirement with respect to an early-distribution penalty from an IRA is that they be paid in the same year as the distribution.

Note that the penalty exception only needs to be applied to the portion, if any, of the distribution from a Roth IRA that would otherwise be subject to an early-distribution penalty. See the ordering rules for Roth IRA distributions:

https://www.irs.gov/publications/p590b#en_US_2023_publink100089915