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Level 1
posted Jan 31, 2025 12:33:00 PM

Hardship withdrawal from 401k / exception

I had to do a Hardship withdrawal to prevent eviction they took out some for taxes, do I qualify for an exception?

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1 Best answer
Level 15
Feb 1, 2025 5:53:32 AM

The early-distribution penalty on up to $1,000 may be avoidable as an emergency personal expense:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

2 Replies
Expert Alumni
Jan 31, 2025 6:33:19 PM

The withdrawal from your 401(k) has to be included in taxable income and could be subject to a 10% penalty if you're under 59.5 years old. Even though preventing eviction is a valid reason for a hardship withdrawal, it doesn't qualify for an exception to the early withdrawal penalty. 

 

For a list of what types of distributions qualify for the exception to the early withdrawal penalty, see Retirement topics - exceptions to tax on early withdrawals.

Level 15
Feb 1, 2025 5:53:32 AM

The early-distribution penalty on up to $1,000 may be avoidable as an emergency personal expense:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions