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Wifeseperated from job nov 17 cashed out 401 k due to speration jan18turned 55 july 18 do we have to pay 10% early withdrawal fine

my wife seperated from job 11/2017 cashed out 401k due to that separation 1 /2018 she turned 55 7/2018 do we have to pay the 10% early withdrawal penalty

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Level 2

Wifeseperated from job nov 17 cashed out 401 k due to speration jan18turned 55 july 18 do we have to pay 10% early withdrawal fine

Based on what you're stating, this income doesn't appear to qualify for any of the exceptions to the 10% early withdrawal penalty. 

Please see the TurboTax article "What You Need to Know About 401(K) Early Distributions and Taxes" and the TurboTax FAQ "What are the exceptions to the penalty for an early withdrawal from my 401(k)?" below for additional information.

https://ttlc.intuit.com/replies/5881082

The IRS article Retirement Topics - Exceptions to Tax on Early Distributions is also helpful in understanding this issue.