Withdrawing from your 401(k) account to pay for medical bills is not an exception to the early withdrawal penalty.
However, this year, you can withdraw once up to $1,000 for personal emergency and be excepted for the early withdrawal penalty.
Please read this TurboTax Help article for more information.
1. If you are still employed, you must ask your employer for a hardship withdrawal. Your employer is allowed to decide whether or not they will allow hardship withdrawals and what qualifies as a hardship, not all employers allow this.
2. If you are still employed, consider taking a loan from your 401k instead. You can borrow up to half your funds, with a 5 year repayment (payments are payroll deductions). Loans are not taxable unless you stop making payments.
3. If you are no longer employed with the plan sponsor you can withdraw at any time for any reason. However, all withdrawals are subject to regular income tax.
4. If you are under age 59-1/2, withdrawals are subject to a 10% penalty for early withdrawal on top of normal income tax.
5. There are a few exceptions to the early withdrawal penalty. The ones that might apply to you are an exception for up to $1000 for any fiancial emergency, and an exception for medical expenses if your medical expenses are more than 7.5% of your adjusted gross income.