[9254]
September 18, 1997
TO: PENSION MEMBERS No. 42-97
PENSION OPERATIONS ADVISORY COMMITTEE No. 34-97
RE: IRS CLARIFIES NEW RULE REGARDING PENALTY-FREE IRA
WITHDRAWALS FOR EDUCATION
______________________________________________________________________________
The Internal Revenue Service has clarified the effective date of the provision in the
Taxpayer Relief Act of 1997 that permits penalty-free early withdrawals from Individual
Retirement Accounts if the withdrawal is used to pay qualified higher education expenses.
According to the release, Notice 97-53, this provision is effective for IRA distributions made
after December 31, 1997, with respect to expenses paid after that date, for education provided in
"academic periods" beginning after that date. An "academic period" includes a semester,
trimester or quarter, or other academic term designated by the educational institution and
begins on the first day of classes, not including periods of orientation, counseling or vacation.
We will keep you informed of developments.
Russell G. Galer
Assistant Counsel - Pension
Attachment (in .pdf format)
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Center at (202)326-8304, and ask for this memo’s attachment number: 9254.