peggygallo
Level 2
‎03-08-2021 03:27 PM

My cient took out $137,000 from his 401k plan.  It caused a 10% penalty for early withdrawal.

In 2020 he tested positive for Covid, was laid off from his job for a while, had a car accident which caused $7,000+ medical bills, and had to move to a new appartment.  How much can I say is exempt from the 10% penalty?  Can I exempt the max of $100,000?

0 Cheers
Just-Lisa-Now-
Level 15
Level 15
‎03-08-2021 03:46 PM
100k max, yes.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
qbteachmt
Level 15
‎03-08-2021 05:22 PM

Are you considering more than one hardship applies? covid (disaster) and medical expense (unreimbursed) and medical insurance and lost job?

https://www.irs.gov/instructions/i5329

https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-hardship-distributi...

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

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-hardship-distributions#1

https://www.investopedia.com/articles/retirement/02/111202.asp

I don't think you'll get to $137k, even then.

 

 

 

 

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