IRA 10% penalty exclusion – college tuition
Does paying the college for internships qualify as eligible tuition for exclusion from the 10% early withdrawal penalty from an IRA?
Does paying the college for internships qualify as eligible tuition for exclusion from the 10% early withdrawal penalty from an IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2014-07-23 19:55
Hard to find anything definitive on this, but if the cost is required by the college and credits are awarded, I would consider the direct cost (not living costs or room and board) of the internship as tuition or fees, which is the only category these costs could fall under and still comply with Sec 529(e)(3), which defines higher education costs for purpose of the IRA early distribution penalty waiver.
Permalink Submitted by Dennis Prout on Wed, 2014-07-23 20:35
I was not able to find anything concrete either, but this makes sense. Hopefully the IRS would agree. Thank You!