Qualified first-time home buyer distributions

[jkelly32]

When making this distribution, can taxes be withheld for Federal and State payments in excess of the $10,000 penalty free amount?  That is, can I receive the full $10,000, but withhold $2,500 for Federal income taxes (as an example) and not be penalized on the $2,500?  After all, I'm not distributing those funds, but simply covering the additional ordinary income tax liability I'll incur from the $10,000 distribution.  Thanks!

[Carl]

That depends on your plan. This question can only be answered by the plan administrator. There is no law that requires withholding. But it may or may not be a requirement of your plan. So ask your plan administrator.