If she withdrew it for that reason, she doesn’t get to have the penalty waived.  The penalty is waived for folks having financial hardships due to COVID.

thank you, does it says in the form the reason why you have to withdraw early the 401K?

Which form are you asking about?  Did she suffer a financial hardship because she was unemployed or ill, or did she pull it out because it was a good time to do it because the penalty was potentially waived?

Thank you again. The form I'm talking is when you pull out the 401K from the company, if they're asking for reasons, hardship or etc.. I think that's the reason because she heard of waiver of 10% penalty that's why she pull out her retirement.

Some providers included a declaration on the withdrawal request form and some did not. It's a self-certification, anyway.