From Pub 590
"Higher education expenses. Even if you are under
age 59 1 / 2 , if you paid expenses for higher education
during the year, part (or all) of any withdrawal may not
be subject to the 10% additional tax on early withdrawals.
The part not subject to the tax is generally the
amount that is not more than the qualified higher education
expenses (defined later) for the year for education
furnished at an eligible educational institution (de-fined
later). The education must be for you, your
spouse, or the children or grandchildren of you or your
spouse.
When determining the amount of the withdrawal that
is not subject to the 10% additional tax, include qualified
higher education expenses paid with any of the
following funds.
? An individual's earnings.
? A loan.
? A gift.
? An inheritance given to either the student or the
individual making the withdrawal.
? Personal savings (including savings from a qualified
state tuition program).
Do not include expenses paid with any of the following
funds.
? Tax-free distributions from an education IRA.
? Tax-free scholarships, such as a Pell grant.
? Tax-free employer-provided educational assistance.
? Any tax-free payment (other than a gift, bequest,
or devise) due to enrollment at an eligible educational
institution.
Qualified higher education expenses. Qualified
higher education expenses are tuition, fees, books,
supplies, and equipment required for the enrollment or
attendance of a student at an eligible educational institution.
In addition, if the individual is at least a half-time
student, room and board are qualified higher education
expenses.
Eligible educational institution. This is any college,
university, vocational school, or other postsecondary
educational institution eligible to participate in the
student aid programs administered by the Department
of Education. It includes virtually all accredited, public,
nonprofit, and proprietary (privately owned profit-making)
postsecondary institutions. The educational
institution should be able to tell you if it is an eligible
educational institution."
Best wishes,
I2 |
