Hardship Withdrawal For Education
Can anyone take a penalty free IRA w/d to cover higher education expenses or are their other qualifiers (income, non-IRA assets, etc)? What reporting is required to notify custodian or IRS that you are taking dist. for higher education expenses?
Permalink Submitted by Alan Spross on Thu, 2007-10-11 05:02
The IRA owner can take such a distribution for the qualified higher education expenses of himself, spouse, children, or grandchildren. There are no other income or related requirements.
There is no use in involving the custodian in the distribution because the custodian is still required to code the 1099R as an early distribution, Code 1. As such the IRA owner must file Form 5329 with his tax return to claim the higher education exception. The exception code is 08.
Of course, the IRS could always request corroborating documentation of the expenses paid, but likely will not.