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garlock-rebecca
January 31, 2025
Solved

Hardship withdrawal from 401k / exception

  • January 31, 2025
  • 2 replies
  • 0 views

I had to do a Hardship withdrawal to prevent eviction they took out some for taxes, do I qualify for an exception?

Best answer by dmertz

The early-distribution penalty on up to $1,000 may be avoidable as an emergency personal expense:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

2 replies

K
KeshaH
February 1, 2025

The withdrawal from your 401(k) has to be included in taxable income and could be subject to a 10% penalty if you're under 59.5 years old. Even though preventing eviction is a valid reason for a hardship withdrawal, it doesn't qualify for an exception to the early withdrawal penalty. 

 

For a list of what types of distributions qualify for the exception to the early withdrawal penalty, see Retirement topics - exceptions to tax on early withdrawals.

    D
    dmertzAnswer
    Employee
    February 1, 2025

    The early-distribution penalty on up to $1,000 may be avoidable as an emergency personal expense:

    https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

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