Which option do i select for Hardship Withdraw from 401k for eviction avoidance?

[eric78559]

Had to take $5000 out of 401k to pay back rent.

[MaryK4]

Unfortunately, the hardship allows you to take the withdrawal from your 401k, but it does not exempt you from the penalty for early withdrawal.  Under the SECURE 2.0 Act (which is fully active in 2026), there is a specific exception for "Emergency Personal Expenses", but you can only exempt up to $1,000 from the 10% penalty once per year for "unforeseeable or immediate financial needs."   You can indicate this in TurboTax for partial exemption. 

You would have to qualify for another exception for full exemption.  See 401(k) Early Withdrawal: Understanding the Consequences.

[dmertz]

To exempt a full $1,000, at least $1,000 would have to have been taken as a single distribution.  Only one distribution per year is eligible for this exception to the early-distribution penalty.  For example, if multiple distributions were taken and the largest of those distributions was $600, only $600 would qualify for this exception to the early-distribution penalty.

Note that during entry TurboTax does not enforce the $1,000 limit, so you yourself must limit the amount on which you claim this exception to no more than $1,000, otherwise TurboTax will later flag the entry as an error that you will need to correct.