The term “emergency personal expense distribution” means any distribution made from an applicable eligible retirement plan to an individual for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses."
You certify this to the plan yourself.
You can withdraw up to $1000, it will still be subject to income tax, but is not subject to the 10% penalty for early withdrawal.
There are several additional rules.
1. You may repay the emergency distribution any time during the next 3 calendar years. If you do this, you can file an amended return to remove the income tax you paid. (You are not required to repay the emergency distribution.)
2. You can not claim the penalty exclusion for emergency expenses again for the next 3 calendar years unless
a. You have repaid the previous emergency distribution, or
b. Your elective salary deferrals into the plan are more than the amount of the un-repaid emergency distribution.
3. Even if you repaid the previous emergency distribution or you have elective deferrals more than the un-repaid amount, you still can only use this penalty exception a maximum of once per calendar year.
Lastly, note that if you are still working for the employer who sponsors the plan, you may be allowed to take a "hardship withdrawal" if you have a qualifying hardship. That is subject to separate rules and you can do it more than once per 3 years, but you can't exclude the 10% penalty if you are under age 59-1/2. And employers don't have to allow hardship withdrawals at all, it's up to them. The special rule for family emergencies is only about the additional 10% penalty on the first $1000 of an emergency or hardship withdrawal.
