I took money out of 401k to rent an apartment

[barbaraf2015]

I was living with a family member. I needed the money to moved myself and children into an apartment. I payed upfront the 10 % ($400) for the $4000 I recieved. Can my penalty be reduce.

[jerry2000 · Accepted solution]

Unfortunately, No. That is not an exception to the penalty for early withdrawal. Your withdrawal if fully taxable as ordinary income and if you were under 59 1/2, then the penalty for early withdrawal will apply.
The amount withheld from your distribution was only an estimate, just like withholding from your paycheck. The exact amount of tax is not known until you prepare your tax return, because it depends on how much other income you have. The distribution is added to your other income  and taxed at whatever your marginal rate is, and the early withdrawal penalty is added, if appropriate. The total amount of added tax may be more or less than what was withheld. You get full credit for the tax that was withheld at the time of withdrawal.