Hardship 401k penalty

[bayouranch]

I’m doing my 2023 returns and I took out of 401 k my father in law and dad were sick. Father in law passed 2023 and my dad 2024. I missed work had to pay mortgage , kids tuition and other things.

[xmasbaby0]

Are you using 2023 software for the 2023 return?    The current online program is only for 2024 returns----no other year.

You cannot change the tax year.   The current online program is for 2024 only.   Only a 2024 return can be prepared online and only a 2024 return can be e-filed.

Online preparation and e-filing for 2021, 2022, and  2023 is permanently closed.

Note:  The desktop software you need to prepare the prior year return must be installed/downloaded to a full PC or Mac.  It cannot be used on a mobile device.

To file a return for a prior tax year

 If you need to prepare a return for 2021, 2022, or 2023  you can purchase and download desktop software to do it, then print, sign,  and mail the return(s)

https://turbotax.intuit.com/personal-taxes/past-years-products/

You may also want to explore purchasing the software from various retailers such as Amazon, Costco, Best Buy, Walmart, Sam’s, etc.

Remember to prepare your state return as well—if you live in a state that has a state income tax.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-rev...

When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as certified mail so you will know the IRS/state received

You will need to enter the 1099R for the money you took out of the 401k.  The software will calculate the tax you owe.

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

[Opus 17]

Duplicate question.

Withdrawals made in 2023 are only reported on a 2023 return.  You need to have the 2023 program installed on your own computer, you can't do it online.  Withdrawals made in 2024 are reported on a 2024 return only.

401k withdrawals are always subject to regular income tax.  There is a general exception to the 10% penalty for early withdrawal for family emergencies, but only on the first $1000 of the withdrawal.  And, you can only use that exception once every three years unless you have made more than $1000 of new contributions to the 401k between emergency withdrawals.  The rest of the withdrawal is subject to the 10% penalty.  There are other specific exceptions if you use the money for certain expenses, listed here.  But they don't seem to apply to you.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-o...

It probably would have been better to borrow the money from the 401k.  You can generally borrow up to 50% of your plan balance.  Withdrawals are not taxable unless you default (stop making payments).  Payments must be made by payroll deduction and can usually be spread out over 5 to 10 years. 

[dmertz]

The exception on a distribution of $1,000 for personal emergencies was not available in 2023.  That exception is only applicable to distributions made in 2024 and beyond.