Submitted by Mega_Fry t3_10q60u3 in personalfinance
Levertki1 t1_j6o2zlx wrote
Reply to comment by nothlit in Claiming refund for 401(k) withdrawal penalty by Mega_Fry
I don’t think that is correct. I believe it is one of the 5 hardship withdrawal exceptions.
nothlit t1_j6o3kby wrote
Hardship withdrawals are still subject to the 10% penalty unless some other exception applies
Levertki1 t1_j6o3wz8 wrote
Principal residence is an exception. Correct?
Number 2 on last irs section you posted.
nothlit t1_j6o4sxe wrote
I'm not seeing the phrase "principal residence" anywhere on that page.
If you look at the table under the row for "homebuyers" it clearly says "no" for qualified plans (401k, etc.) and "yes" for IRA.
Levertki1 t1_j6o6hng wrote
Last one you posted before you changed it.
nothlit t1_j6o770h wrote
That just means you're allowed to take the withdrawal for that reason. It doesn't mean it's exempt from the 10% penalty.
> Hardship distributions are subject to income taxes (unless they consist of Roth contributions). They may also be subject to a 10% additional tax on early distributions.
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