Yes, you will pay tax on the 401k distribution. There is no exception for using 401k money for home improvements. You will receive a 1099R in late January/early February which must be entered 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.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
