Roth IRA
Are the earnings from a Roth IRA tax and penalty free if used for college expenses if the account holder is under age 59 1/2?
Are the earnings from a Roth IRA tax and penalty free if used for college expenses if the account holder is under age 59 1/2?
Permalink Submitted by Alan - IRA critic on Tue, 2016-01-05 16:00
That would be a non qualified Roth distribution. Earnings come out last but will be taxable, but the higher education penalty exception would eliminate the 10% penalty. Form 5329 needs to be filed showing exception code 08 on line 2. You might consider limiting the distribution to the contributions amount and leave the earnings in the Roth until 59.5 (and 5 years from first contribution), when they become tax free.