Well, if you are younger than 59 1/2 you will be penalized for the early withdrawal. Taking money out of a 401k to purchase a house is NOT an exception to the early withdrawal penalty. You will also be subject to ordinary income tax on the money you take out, so it is a very expensive way to make a down payment. If you had a traditional IRA you would be able to take out up to $10,000 without penalty but that is not true for a 401k.
Next year in January or February they will send you a 1099R for the distribution from the 401k that you take in 2020 and you will be required to enter it on your 2020 tax return.
**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.**
