i withdrew money from my 401k for a down payment on a house (not my first home purchase & not 59). we had to sell our original house do an interest only loan & we could not refi the loan. we came out of the sell on the house with $12k not enough for another house, so i withdrew from my 401k.
You may be in luck! One of the exceptions to the 10% penalty is that the early distribution was used for payment of a house OR if you do not qualify for that, it may be a hardship distribution. You should speak to a CPA or tax attorney to determine if you qualify.
Andrew B. Gordon, Esq., CPA
Andrew B Gordon is a CPA and attorney licensed to practice law in Illinois. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
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While you may have been eligible for a hardship distribution for the purchase of the house, unfortunately the hardship does not avoid income tax and the early withdrawal penalty of 10%. There is a first time homebuyer exception to the early withdrawal penalty but this is for distributions from an IRA, not a 401(k) plan. Unfortunately you will have to pay the penalty.