Birth or adoption withdrawal
Up to $5,000 penalty-free
Can You Write Off Birth or Adoption Withdrawal?
Short answer: Up to $5,000 per child taken within a year of a birth or adoption skips the 10% penalty, and you can repay it.
Withdrawals before 59½ are taxed as income plus a 10% penalty unless an exception applies; exceptions waive the penalty, not the income tax.
Records to keep: Keep receipts, statements (1098, 1098-T, 1099, W-2G), and a note of what each cost was for. Compare itemizing to the 2026 standard deduction before you claim.
Birth or adoption withdrawal
Typical range: Up to $5,000 penalty-free
Individuals / Personal Taxes
Up to $5,000 per child taken within a year of a birth or adoption skips the 10% penalty, and you can repay it.
Business justification
Up to $5,000 per child taken within a year of a birth or adoption skips the 10% penalty, and you can repay it. Withdrawals before 59½ are taxed as income plus a 10% penalty unless an exception applies; exceptions waive the penalty, not the income tax.
Category
- Personal Tax Deductions