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where do I enter info for exemption of 10% penalty on early 401K withdrawal?

Forum|Forum|4 years ago
March 4, 2022
5 replies
25 views

Client did early wihdrawal for purchase of personal residence. Gave all necessary info to payer and declared a hardship. The payers' code is 1 so how do I avoid him paying he 10% penalty due to hardship?

Individual

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Best answer by IRonMaN

Check out form 5329

IRonMaNAnswer

Level 15

Check out form 5329

Slava Ukraini!

J

Jane-oAuthor

Level 2

Thank you!!

IRonMaN

Level 15

You betcha!

Slava Ukraini!

T

TaxGuyBill

Level 15

A "hardship" only allows the money to be withdrawn. That does NOT waive the penalty.

But as was mentioned, you can see if the taxpayer has any qualifying reasons to waive the penalty on Form 5329.

IRonMaN

Level 15

Withdrawal was to buy a house -------- I am assuming Jane knows that they have to qualify as first time buyers to qualify.

Slava Ukraini!

rbynaker

Level 13

Did something change? The first-time homebuyer penalty exception used to only apply to IRA withdrawals, not 401k withdrawals.

qbteachmt

Level 15

Hardship and Home Purchase are two different provisions, if you are referring to First Time Homebuyer; or Disaster Home?

Don't yell at us; we're volunteers

Just-Lisa-Now-

Intuit Community Champion

NO penalty exception for the situation you described, sorry. Had to be an IRA to waive penalty on the first 10,000 for a first time home purchase.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

IRonMaN

Level 15

For my second oops of today - I missed the 401k part of the question.

Slava Ukraini!

R

rcooley25

Level 7

You and I had the sames question about the same time.

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