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It depends. Since you are under age 59 ½, you will have to pay a 10% penalty on the distribution. The IRS does allow some exceptions to the penalty including total and permanent disability, unreimbursed medical expenses that exceed 7.5% of your AGI or rollover into another retirement plan within 60 days. Please refer to the IRS website Retirement Topics - Exceptions to Tax on Early Distributions and the TurboTax Help article What are the exceptions to the penalty for an early withdrawal from my 401(k)? for additional information.
is it considered an error on the part of the custodian to not inform you of your rollover options?
CFR 1.402(f)-1 Q&A-2 requires the employer to provide a written explanation to recipients about rollover options at least 30 days before the distribution unless the recipient waives the requirement. Failure of the employer to provide such written explanation might constitute an error on the part of the distributing financial institution that would allow one to self-certify that the distribution would qualify for a waiver of the 60-day rollover deadline under Rev. Proc. 2020-46.
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