You'll need to sign in or create an account to connect with an expert.
To qualify for the hardship exemption (no 10% penalty) for a 401 (k) distribution, you must meet the IRS definition total and permanent disability:
A person is permanently and totally disabled if both of the following apply. He or she can't engage in any substantial gainful activity because of a physical or mental condition. A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death.
If you do qualify based on the above, although you would avoid the 10% penalty, your income would be taxed at your ordinary income rate. The income is not a deduction.
However you may be able to deduct your medical expenses due to your disability.
See What are the exceptions to the penalty for an early withdrawal from my 401(k)?
https://ttlc.intuit.com/questions/3701254-what-are-the-exceptions-to-the-penalty-for-an-early-w...
To qualify for the hardship exemption (no 10% penalty) for a 401 (k) distribution, you must meet the IRS definition total and permanent disability:
A person is permanently and totally disabled if both of the following apply. He or she can't engage in any substantial gainful activity because of a physical or mental condition. A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death.
If you do qualify based on the above, although you would avoid the 10% penalty, your income would be taxed at your ordinary income rate. The income is not a deduction.
However you may be able to deduct your medical expenses due to your disability.
See What are the exceptions to the penalty for an early withdrawal from my 401(k)?
https://ttlc.intuit.com/questions/3701254-what-are-the-exceptions-to-the-penalty-for-an-early-w...
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Reemo
Level 1
Dchackert
New Member
sherryburke1206
New Member
ajv28
New Member
SelenaP
Returning Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.