My child received a distribution from an Education IRA last year. Am I still eligible to claim the applicable education credit to reduce the tax I owe to the IRS?
Generally, no. The education credits cannot be claimed in the year a student receives a tax-free distribution from an Education IRA. However, the student may waive the tax-free treatment of the Education IRA distribution and elect to pay any tax that would otherwise be owed on the IRA distribution received in that taxable year. The student or the student’s parents may then claim either of the credits for expenses paid in said year.
