Early 401(k) withdrawal

[DTS]

I am confused about the rules for an exception to the 10% early withdrawal penalty. To me, it seems like there are two conflicting answers, one that would allow an exception to the 10% penalty and one that would not.

Client took distribution from 401(k) to purchase first home. Is she eligible for this exception? On some literature I'm reading, she would be, as the IRS allows this under the hardship safe harbor. Yet, Pub. 560 states no.

Does she have an exception to the penalty for this?

Thank you,

Dennis

[taxonomy]

Ira

Generally the home buying exception is for IRAs, not 401k

[solomon]

If the plan permits

a hardship withdrawal, then expenditures to purchase the house are allowed - not the mortgage payments. However, under Sec. 72(t), this is not an exception to the 10% penalty.

[DTS]

taxonomy and solomon

Sorry I'm just now getting back to the post.

Thanks to both of you for your help. I appreciate it.

Dennis