The IRS allows the penalty exception only if the account holder (you) is permanently disabled. Unfortunately, a spouse’s disability doesn’t qualify for this exception. See IRS 401(k) Withdrawal Rules and Disability topic.
- Regardless of the penalty exception, you’ll still owe regular income taxes on the withdrawal.
- If you’re using the funds for medical expenses, you might qualify for another exception if those expenses exceed 7.5% of your adjusted gross income (AGI).
TurboTax Can Help:
TurboTax will guide you step-by-step to determine if any exceptions apply to your situation, including medical expense deductions.
