My husband was forced to cash out his 401k due to his employer terminating the policy. Does this qualify under "other" reason to not have to pay additional tax?

[clmanning]

He had 20% withheld already.

[Opus 17 · Accepted solution]

Unfortunately no. Even if the employer ended the program, you would have the option to roll the money over into a regular IRA and it would be tax-free, and continue to accumulate until retirement age. Taking the money for personal use makes it a taxable distribution and subject to the penalty unless he terminated from that employer and was over the age of 55.

 TurboTax will calculate the total tax due on all of your income, plus the penalty. You will get credit for the 20% withholding, although you will probably owe more, which will reduce your regular refund or result in an additional tax due.