---

@judys3 wrote:

 from 401k to purchase a house ... They were under the understanding they could pull the 60k and not be taxed. 

---

Some taxpayers misunderstand what a "hardship withdrawal" means.  In most cases, a taxpayer can't withdraw from their 401(k) through their employer unless it is a "hardship withdrawal".  Purchasing a principal residence qualifies as a "hardship withdrawal", which allows the taxpayer to withdraw money.

But they misunderstand that a "hardship withdrawal" does not change the fact it is taxable and potentially subject to the 10% penalty.