Perhaps CAPS is a sign of desperation something many of us encounter this time of year. I am not sure this will be what you are looking for but perhaps it will be of some help. As this resource points out there is a difference between penalty free and tax free. I think this may be the source of the confusion. You will want to check but there is normally a period to repay the distribution if in fact there was a misunderstanding.https://www.dontmesswithtaxes.com/2022/10/tax-issues-when-tapping-retirement-accounts-after-a-disast...