Withdrew money from 401K to help pay medical expense for a child I'm guardian of but someone else claims as dependant. May I use this to reduce tax penalty on withdrawal?

No, you can only deduct medical expenses for yourself, your spouse and your dependents. Since you can't deduct the medical expenses, you don't qualify for the 10% penalty exemption.

Per IRS Publication 502: Whose Medical Expenses Can You Include?

You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them.

• There are different rules for decedents and for individuals who are the subject of multiple support agreements. See Support claimed under a multiple support agreement , later, under Qualifying Relative.

The expenses would have to be deductible on your tax return, meaning that the person is your dependent, or someone who could qualify as your dependent but you do not claim them due to certain specific rules.

Then, the only part of the medical expenses that are eligible for the penalty exception is the part that is more than 7.5% of your adjusted gross income.

If you want to clarify this person's status as a dependent or as eligible for you to deduct their expenses, we would need more details of the situation.