No you cannot. A withdrawal from a tax deferred retirement account is a taxable event. You would enter the taxable amount of the withdrawal on your federal tax return and it is taxed at your current tax rate. If you were under the age for the early withdrawal penalty exception then there would be a 10% early withdrawal penalty assessed on the federal tax return and entered as a tax liability.
There is no early withdrawal exception for a first time home purchase using a 401(k). The exception to the 10% penalty is only for withdrawals from an IRA for a first time home purchase and then only on the first $10,000 withdrawn.
I didn't withdraw enough from 401k. Can I still do it for 2017
@alstheresa
You mean your RMD? Was 2017 your first year to do so?
If I used my 401(k) funds ($14,000) as a down payment as a first-time home buyer, is there any exemption? I recently received a proposed bill for $4600 due to this. I was wondering if there was anyway around it. I thought there was a benefit for first-time home buyers.
Using funds from a 401k for a down payment on a home is NOT an exception to the early withdrawal penalty. If you took money out of a traditional IRA, the first $10,000 would not be subject to the early withdrawal penalty. That is not true for money you take from a 401k. So if you are under 59 1/2, and you took money from your 401k, you are subject the the 10% penalty for early withdrawal AND ordinary income tax on the money you took out. It is an expensive way to make your down payment.