I had to do an early withdrawal from my 401k for mom's funeral, one page says it's tax free the next page says it's taxable income, why?

[BrittanyS]

Withdrawals from a 401k are considered taxable income.  However, if you are under 59 1/2, the IRS will charge an additional early withdrawal penalty for taking a withdrawal early.  The penalty can be waived if you meet certain criteria.  Per the IRS, "plans may allow a hardship distribution to pay for your, your spouse’s, your dependents’ or your primary plan beneficiary’s":

• medical expenses,
• funeral expenses, or
• tuition and related educational expenses

When entering into TurboTax if you entered this as a hardship distribution, the early withdrawal penalty was removed but the withdrawal amount is still subject to income tax.  

For more information, see the link below:

• 401k plans

[Opus 17]

Withdrawals from a pre-tax 401k are always taxable.  In most cases, you also pay a 10% penalty if you are under age 59-1/2.  There are a few exceptions to the penalty, but the only one that might apply to you is you can exclude $1000 from the penalty for a personal emergency.  But if you withdrew more than $1000, you pay the penalty on the rest and tax on all of it.

Even though your plan may allow a hardship withdrawal, it is still taxable. 

If you have left the company, you can withdraw for any reason (you do not have to prove a hardship) but you still pay income tax and penalties.