I took and early withdrawal from an IRA for qualified educational expenses. Based on some info I got here previously, I instructed the broker (Schwab) to code it as a Type 2. I had also spoken with a representative there previously who confirmed that it should be coded at Type 2.
When I made the withdrawal, they insisted it had to be a type 1. They had two conditions for a type 2, neither of which related in any way to qualified educational expenses. They advised me that I'd need to file a 5329 to cover that.
Questions:
- Are they wrong about the coding? If so, is there a section of tax code I can extract and refer them to push for a correction?
- Should I care? Is the only difference that I have to file a 5329? Does this have any other effects?
Thanks,