The purchase of your first home has no bearing on the tax treatment of the 401(k) distribution that is reportable on your 2020 tax return. If the 401(k) distribution qualifies as a Coronavirus-Related Distribution, you can indicate to TurboTax that it is COVID-19-related so that TurboTax will include it on Form 8915-E to eliminate the early-distribution penalty and allow you to spread the income over 3 years.
