Every IRA owner is eligible to make a withdrawal from their IRA without having to have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time home buyer distribution, the distribution must meet all the following requirements:
- It must be used to pay qualified acquisition costs (defined next) before the close of the 120th day after the day you received it.
- It must be used to pay qualified acquisition costs for the main home of a first-time home buyer (defined below) who is any of the following.
- Your spouse.
- Your or your spouse's child.
- Your or your spouse's grandchild.
- Your or your spouse's parent or other ancestor.
- When added to all your prior qualified first-time home buyer distributions, if any, total qualifying distributions cannot be more than $10,000.
If both you and your spouse are first-time home buyers (defined later), each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax, but will still be subject to ordinary income taxes.
How do I actually request the withdrawal?
Withdrawing for the purchase of your first home is as easy as visiting our Withdrawals Page and requesting a withdrawal of up to $10,000.
How do I claim my exemption for the first time home buyer withdrawal when filing my taxes?
You must use Form 5329 to report the tax on early distributions. There will be a section to input early withdrawals that are penalty free. You can add up to 10,000 in this box for your first time home buyer's withdrawals.