I know one person can withdrawal up to 10k without a 10% penalty from 401k for a house downpayment. Can both people in a marriage do that if they have separate 401ks? 20k in total, without 10% penalties?
No. There is no exception to the 10% early withdrawal penalty for a first time homebuyer if the withdrawal is from a 401(k).
Only a withdrawal from an IRA is eligible for the early withdrawal exception and then only the first $10,000 withdrawn is eligible. If both you and your spouse are first-time homebuyers, each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax
See IRS Publication 590-B Distributions from Individual Retirement Arrangements (IRAs) - https://www.irs.gov/pub/irs-pdf/p590b.pdf
IRS Tax Topic - Additional Tax on Early Distributions from Traditional and Roth IRAs - https://www.irs.gov/taxtopics/tc557
IRS Tax Topic - Additional Tax on Early Distributions from Retirement Plans Other than IRAs - https://www.irs.gov/taxtopics/tc558
No. There is no exception to the 10% early withdrawal penalty for a first time homebuyer if the withdrawal is from a 401(k).
Only a withdrawal from an IRA is eligible for the early withdrawal exception and then only the first $10,000 withdrawn is eligible. If both you and your spouse are first-time homebuyers, each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax
See IRS Publication 590-B Distributions from Individual Retirement Arrangements (IRAs) - https://www.irs.gov/pub/irs-pdf/p590b.pdf
IRS Tax Topic - Additional Tax on Early Distributions from Traditional and Roth IRAs - https://www.irs.gov/taxtopics/tc557
IRS Tax Topic - Additional Tax on Early Distributions from Retirement Plans Other than IRAs - https://www.irs.gov/taxtopics/tc558