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Will be FIRST TIME HOME BUYER this year, 2009. Want to know if I can use 403 Tax Sheltered Annuity money as part of deposit WITHOUT penalty?
Hello hollliss, The only time you can take an early withdrawal from your 403 plan and avoid the early withdrawal penalty, is in the following situations: - Withdrawals upon death or disability of plan investor - You are 55 or over and quit your job - Distributions received over lifetime as "substantially equal payments" - Medical expenses exceeding 7.5% of your adjusted gross income - The distributions were required due to a divorce agreement or settlement Early withdrawals used to make a down payment on a first home do not qualify for the penalty exception. A first time homebuyer may withdraw up to $10,000 from a traditional IRA account for a first time home purchase and not pay the early withdrawal penalty, but the rules are different for a 403 plan and a 401k plan. Sorry I could not give you bettr news holliss, but if you do have funds in an IRA account, you could make the withdrawal using the IRA funds. If this was helpful please press the Accept button. Thank you holliss, and let me know if you have more questions. I am happy to help you with whatever I can.
Accountant
25+ years tax consulting. Specializing in returns for US citizens living abroad