I understood if I am permanently disabled I do not have to pay the 10% penaly on 401K withdrawals?

[Marketstar · Accepted solution]

Yes, to qualify for the disability exemption for the 10% penalty , you must meet the following IRS definition:

Be permanently disabled – If you are totally and permanently disabled, which is defined by the IRS as an identifiable physical or mental impairment that makes you unable to work, then you are permitted to take early distributions without penalty.

See What You Need to Know About 401(K) Early Distributions and Taxes

https://blog.turbotax.intuit.com/income-and-investments/401k-ira-stocks/what-you-need-to-know-about-...