Laid Off-Withdrew Balance of 401K

[zeros]

Lady was laid off and was out of work for about a year. She had a mortgage on her home and had to withdraw from and exhaust her 401K to make the mortgage payments. She is under 59-1/2. She understands that she will have to pay the taxes but was wondering if there is any exception to the 10% penalty under her circumstances? She, currently, has an automatic extension on her 2009 return.

[ChEAr$]

Lady was laid off and was out of work for about a year. She had a mortgage on her home and had to withdraw from and exhaust her 401K to make the mortgage payments. She is under 59-1/2. She understands that she will have to pay the taxes but was wondering if there is any exception to the 10% penalty under her circumstances? She, currently, has an automatic extension on her 2009 return.

No exception for regular living expenses; nor going to Las Vegas and blowing it. (grin

[Lion]

401

I guess she didn't set up equal payments. What about over 55 and separated from service? Is there any exception for medical expenses greater than 7.5% or for health premiums when out of work? Or, after unemployment for XX weeks? Was any of it taken out recently? Is it too late to return some of it?

[gkaiseril]

You can look at IRS Pub 575 pages 30 and 31, http://www.irs.gov/pub/irs-pdf/p575.pdf#page=30 .

Exception for 55 or older and separated from service.
Exception for medical expenses over 7-1/2% of AGI.