Search Help Topics:

; ; ;

The qualified education expenses must not include amounts paid using grants, scholarships, or other tax-free benefits.

Per IRS Publication 970 Tax Benefits for Education, Page 62:

Education Exception to Additional Tax on Early IRA Distributions

Who Is Eligible.
You can take a distribution from your IRA before you reach age 59 1/2 and not have to pay the 10% additional tax if, for the year of the distribution, you pay qualified education expenses for:
  • yourself;
  • your spouse;
  • your or your spouse's child, foster child, adopted child; or
  • your or your spouse's grandchild.

Qualified education expenses. For purposes of the 10% additional tax, these expenses are tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance.

In addition, if the student is at least a half-time student, room and board are qualified education expenses.

The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts.

  1. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
  2. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.

You will need to contact the eligible educational institution for qualified room and board costs.


Was this helpful to you?