There is no penalty if the distributed funds were rolled over to another eligible retirement plan.
Unlike a loan against your 401(k), a hardship withdrawal can’t be repaid. It will be treated as a taxable distribution and reported on a 1099-R. In most cases, you can’t make contributions to the plan again for at least six months following your withdrawal.
If you took the hardship withdrawal before you turned 59 1/2, you'll pay a 10% early withdrawal penalty, with a few exceptions. Your distribution will also be included in your gross income.
Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax.
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