rbynaker
Level 14

Maybe you can find another exception from the list but there's no penalty exception for education expenses from a 401(k).

https://www.irs.gov/pub/irs-pdf/i5329.pdf

See page 4.  Note that exception 08 applies to IRA distributions.

Personally I wish Congress would fix this.  The rules are inconsistent.  If they rolled the 401(k) into an IRA first and then made the withdrawal, no penalty (not likely permitted for a current employer plan but easy if they have any former employer plans).  IMO this disproportionately impacts lower-income taxpayers.  Folks with multi-million dollar retirement accounts can also afford savvy advisors who can tell them if they're going to do this they have to click their heels together three times while repeating "There's no place like IRA".

Rick