Oh right! I missed the 401K part. Yes it is ONLY for IRA withdrawals. Unless it has changed this was the rule before.
It would be an exception to the IRA 10% early withdrawal PENALTY if you are under 59 1/2. You can exclude up to 10,000 of the withdrawal from the penalty. You still have to pay regular income taxes on the whole amount.
Each spouse can take 10,000 from their own IRA so you can exclude up to 20,000 from the early withdrawal penalty. That is a lifetime max from all IRA & ROTH IRA accounts for each person.
