Thank you for sharing that link!
The exceptions to penalties can be confusing.
If you look at that document, the portion you highlighted does have a footnote #5 which reads:
"5 For purposes of this notice, a “permissible distribution” means a distribution that meets the distribution restriction requirements in sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) and is permissible under the plan. Thus, for example, a participant in a plan that does not permit emergency
personal expense distributions may meet the requirements for a hardship distribution if the plan permits hardship distributions. In addition, a participant who terminated service with an employer with an accrued benefit under a section 401(k) plan that does not permit emergency personal expense distributions may meet the distribution restrictions for severance from employment. "
I read that to mean that a taxpayer can take a 1,000 Emergency Withdrawal if their plan has that option, and if the plan does not, the Taxpayer can still make the distribution and call it something else, such as a hardship Distribution.
I will need to do more research.
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