The distribution you take from your retirement account can be taxable and can be subject to a 10% penalty if you are under the age of 59 1/2. If the funds withdrawn are for a qualifying first-time home purchase, you may be able to exclude up to $10,000 of the money from the 10% penalty. The main qualification is that you did not own a home for two years prior to the date your purchased your home. You can learn more on page 27 of IRS publication 590-B. Pub 590-B
You will see questions regarding this in TurboTax after you enter your From 1099-R reporting your pension plan distribution, if you are subject to the penalty.
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