3468101
You'll need to sign in or create an account to connect with an expert.
Yes, sounds like it may qualify as an "emergency." An emergency will allow you to make a withdrawal, still subject to tax, but without the 10% early withdrawal penalty. You can take one financial withdrawal emergency per year, not to exceed $1,000. So, $2,000 of your withdrawal won't be eligible for penalty relief.
Here is some more information: What are the exceptions to the penalty for an early withdrawal from my 401(k)?
"Other" does not apply.
$1,000 of the $3,000 would qualify for the emergency-expense exception only if you actually needed the money for an unforeseeable or immediate financial need. Losing a job would not necessarily create such an financial need.
See Q&A 1 and 2 in IRS Notice 2024-55: https://www.irs.gov/pub/irs-drop/n-24-55.pdf
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.