What is a qualified birth or adoption exception to the early withdrawal penalty?
You can take a distribution from your qualified retirement account of $5,000 or less due to the birth of your child or adoption of your child without having an early withdrawal penalty. An adopted child includes any individual (other than a child of your spouse) who is less than age 18 or is physically or mentally incapable of self-support. The distribution must be made within a year of the birth or adoption.
The IRS requires a statement with information about your child be included with your tax return to claim this exception. FreeTaxUSA will help you fill out this statement and include it with your tax return.
The $5,000 limit is on a per individual basis, so a married taxpayer and spouse would each be able to distribute $5,000 from their respective retirement accounts. Additionally, the $5,000 limit is on a per child basis, so for twins each parent would be allowed to distribute $5,000 for each child.
If the distribution is due to an adoption, make sure to go to the Your Adopted Child Information screen to claim the adoption credit.
The IRS requires a statement with information about your child be included with your tax return to claim this exception. FreeTaxUSA will help you fill out this statement and include it with your tax return.
The $5,000 limit is on a per individual basis, so a married taxpayer and spouse would each be able to distribute $5,000 from their respective retirement accounts. Additionally, the $5,000 limit is on a per child basis, so for twins each parent would be allowed to distribute $5,000 for each child.
If the distribution is due to an adoption, make sure to go to the Your Adopted Child Information screen to claim the adoption credit.
