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New Member
posted Mar 17, 2025 5:41:10 AM

Hardship on 401k

My father in law was sick and passed in 2023. I have to withdraw early form 401k to help. Also my father was sick and passed in 2024. I was off work and had to use 401k for house my kids college and to take care of my parents.

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2 Replies
Level 15
Mar 17, 2025 5:54:34 AM

For a hardship withdrawal the first $1,000 is exempt from the 10% early withdrawal penalty.  All of the amount over the first $1,000 is subject to the 10% early withdrawal penalty if you were under age 59 1/2 at the time of the withdrawal or you were under the age of 55 and have separated from the company that provided the 401(k).

Expert Alumni
Mar 17, 2025 6:26:23 AM

There is not an exception to the underpayment penalty for hardship withdraws in general.  However, for 2024, there is a $1,000 Emergency personal expenses distribution that can be exempt from the early distribution penalty.  With a 401k, there is not an exception for education.  

 

Any withdrawals you made in 2023 would need to be reported on your 2023 return. Those would not be eligible for the $1,000 emergency personal expenses. And in 2024, the withdrawals you made, should be included on your 2024 return.

 

Retirement topics - Exceptions to tax on early distributions