Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
If I have a Roth IRA and have met the 5 tax year limit but I am under 59 1/2 years old, is an early withdrawal for my child's college both penalty free and earnings tax exempt?

No. See page 42 of IRS Publication 590. You'll not owe the penalty on withdrawals paid directly to an educational institution, but you will owe income tax on any earnings withdrawn before 59 1/2 for this purpose. This is not a "qualified" distribution.

Also are there any limitations on the type of college (public vs private) at which you can use the money?

There are some restrictions, also mentioned in Pub 590, but both public and private institutions qualify.

TMF ExRO
Phil Marti
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.