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What are examples of eligible emergency expenses for early withdrawals from 401k's?

 
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AmyC
Employee Tax Expert

What are examples of eligible emergency expenses for early withdrawals from 401k's?

A TurboTax 5329 article states:

Starting in 2024, the Secure 2.0 Act added cases where money can be withdrawn. These cases include:

  • financial emergencies - one withdrawal per year up to $1,000
  • victims of domestic abuse - within the past 12 months can withdraw up to the lesser of $10,000 or 50% of their account
  • federally declared natural disaster areas - withdraw up to $22,000
  • terminal illness allows withdrawal. You can take any amount if diagnosed with an illness that will likely cause death within seven years.

These are in addition to all the ones already in place, like adoption and medical expenses. To learn more, see pages 2-4 of About Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts

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