My client took money from 401K after she lost her job and couldn't find another. Can she avoid the penalty?  She has 3 kids and only made $13000 from her job.  Took $28000 from the 401 K.  I was thinking a hardship penalty but I can find anywhere to put that on the 1099-R worksheet or the 5329.  She did not tell them it was a hardship when she took it out.