I needed to take an early distribution from my 401(k), which my 401k plan allows. Since the withdrawal was a hardship 401k distribution, and it was allowed under the terms of my plan, am I exempt from the .10 early withdrawal penalty?
No. Many 401(k) plans allow you to take hardship distributions, however, the IRS doesn’t have an early withdrawal from 401k hardship exception to its early withdrawal penalty. Even if you’re allowed to take the 401(k) withdrawal under your plan, you’d still have to qualify for another exception to avoid the .10 early withdrawal penalty.
To learn more about early withdrawal penalty exceptions, see the instructions for Form 5329 at www.irs.gov.
Did you forget to make an estimated payment on your taxes? Learn whether you may be subject to an underpayment penalty. Get tax answers at H&R Block.
There's a new IRS process for those that have an expired ITIN. Here is some information from H&R Block that you need to know before your ITIN renewal.
Can you can an exemption for early distribution from a 401k? Knowing the answer can make a big difference. Get tax answers from H&R Block.
Learn more about late filing and payment penalties from the tax experts at H&R Block.