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Level 2
posted May 15, 2021 3:22:37 PM

turbo tax will not let me enter 10,000 to take credit from 401k distribution to purchase first time home

Cannot enter 10,000 on the drop box

0 4 551
4 Replies
Level 15
May 15, 2021 3:24:52 PM

The penalty exception for 10,000 Home is only from a IRA not a 401K.

Level 15
May 15, 2021 3:25:55 PM

A first time home purchase using a withdrawal from a 401(k) is not exempt from the 10% early withdrawal distribution.  Only funds distributed from an IRA are eligible for the early withdrawal exemption for a first time home purchase.

Level 15
May 15, 2021 3:28:06 PM

Sorry---taking money out of a 401k to buy a home is not an exception to the early withdrawal penalty.   That is only for a traditional IRA.     The money you took from a 401k is subject to the 10% penalty and ordinary income tax.   Make sure you have entered your 1099R on your tax return.

 

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

 

Expert Alumni
May 15, 2021 3:35:26 PM

As mentioned above, new home purchase is not an exception for 401Ks, only IRs.   Covid-related distributions are exempt from the penalty and you can see the other 401K exceptions here.