topic 401K early withdrawl in Retirement tax questions

401K early withdrawl

ahaffner01 — Tue, 18 Mar 2025 18:22:42 GMT

My husband was laid off in March of 2024 and had a qualifying 401K with the company he was with. In May 2024 we took an early withdrawl in excess of 18K in order to meet expenses while he was laid off, I am a stay at home mom and did not work for income.

If I turned 60 at the time of the withdrawl even though the 401K is in my husbands name would we qualify for an exemption for the early withdrawl? My husband turned 55 in April.

Re: 401K early withdrawl

MinhT1 — Tue, 18 Mar 2025 18:30:43 GMT

Please clarify. when did your husband turn 55? April 2024 or April 2025?

Re: 401K early withdrawl

ahaffner01 — Tue, 18 Mar 2025 19:16:50 GMT

He turned 55 in April 2024.

Re: 401K early withdrawl

MinhT1 — Tue, 18 Mar 2025 19:23:52 GMT

There are exceptions to the early withdrawal penalty which are listed in this TurboTax Help article.

You can't use your age to justify your husband's withdrawal.

If your husband turned 55 in April 2024, then he can be exempted from the penalty for Separation of Service at age 55 or later.

In this case, this is how to enter this in TurboTax Online:

After you have entered all your forms 1099-R, on the summary page Review your 1099-R Info, click Continue
Follow the interview until you arrive at the page titled These situations may lower your tax bill.
Enter the amount of your distribution in the box next to Separation From Service the Year during or after age 55 and click Continue
Your early withdrawal penalty will be waived (see attached screenshot).