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If I'm understanding correctly, you took $10k or more out of your retirement plan and put it towards a home downpayment.
This money will be taxable (to Fed and State), but could be subject to a penalty on early withdrawal,
unless you meet certain exceptions.
One of the exceptions that could get you out of the penalty (but not the tax) is:
Unfortunately, the first-time homebuyer penalty exception only applies to distributions taken from IRAs, not 401ks or other employer retirement plans.
If the amount you took out of the 401(k) is reported on a 1099-R with code "1" (Early distribution, no known exception) in Box 7, Turbo Tax will help you check for exceptions after you enter the 1099-R.
Is the box that says IRA/SEP/SIMPLE on your 1099-R checked?
If yes, and you otherwise qualify, you can use this exception. Make sure the box is checked in Turbo Tax like it is on the form. Then Turbo Tax will guide you through the additional questions.
If the box IRA/SEP/SIMPLE box isn't checked on your 1099-R form, then unfortunately the first-time homebuyer exception does not apply in your situation.
Hope this helps.
If I'm understanding correctly, you took $10k or more out of your retirement plan and put it towards a home downpayment.
This money will be taxable (to Fed and State), but could be subject to a penalty on early withdrawal,
unless you meet certain exceptions.
One of the exceptions that could get you out of the penalty (but not the tax) is:
Unfortunately, the first-time homebuyer penalty exception only applies to distributions taken from IRAs, not 401ks or other employer retirement plans.
If the amount you took out of the 401(k) is reported on a 1099-R with code "1" (Early distribution, no known exception) in Box 7, Turbo Tax will help you check for exceptions after you enter the 1099-R.
Is the box that says IRA/SEP/SIMPLE on your 1099-R checked?
If yes, and you otherwise qualify, you can use this exception. Make sure the box is checked in Turbo Tax like it is on the form. Then Turbo Tax will guide you through the additional questions.
If the box IRA/SEP/SIMPLE box isn't checked on your 1099-R form, then unfortunately the first-time homebuyer exception does not apply in your situation.
Hope this helps.
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