Generally, if you make withdrawals from your IRA (individual retirement arrangement) before you reach age 59 1/2, you must pay a 10% tax on the early withdrawal. This applies to any IRA you own, whether it is a traditional IRA (including a SEP-IRA), a Roth IRA, or a SIMPLE IRA.

However, you can make withdrawals from your IRAs for qualified higher education expenses for yourself, your spouse, or you or your spouse’s children or grandchildren without having to pay the 10% additional tax. You may owe income tax on at least part of the amount withdrawn, but you may not have to pay the 10% additional tax on early withdrawals. The part not subject to the additional tax is generally the amount that is not more than the adjusted qualified higher education expenses for the year.

Qualified expenses include tuition, fees, books, supplies and equipment required for the enrollment or attendance of a student at an eligible educational institution; special needs services incurred by or for special needs students in connection with their enrollment or attendance; and room and board, if the individual is at least a half-time student.

IRS Publication 590, Individual Retirement Arrangements (IRAs), has more information about these IRAs.

Learn more about the other types of tax benefits available:

• Reduce taxes with the Hope Credit
• Reduce taxes with the Lifetime Learning Credit
• Deduct student loan interest
• Receive tax-free treatment of canceled student loans
• Deduct tuition and fees for higher education
• Cash in savings bonds for education costs without paying tax on the interest
• Receive tax-free educational benefits from your employer

A tax credit reduces the amount of income tax you may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself.

The information contained in this section is from IRS Publication 970: Tax Credits for Education. PNC does not provide tax advice and makes no representation or warranty as to the accuracy of the information. Please consult your tax advisor for tax advice matters contained in this section.

For more information, visit www.irs.gov or call 800-829-1040.