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For you and your family
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Forms and Instructions

Individual Tax Return
Instructions for Form 1040
Request for Taxpayer Identification Number (TIN) and Certification
Request for Transcript of Tax Return

 

Employee's Withholding Allowance Certificate
Employer's Quarterly Federal Tax Return
Employers engaged in a trade or business who pay compensation
Installment Agreement Request

Popular For Tax Pros

Amend/Fix Return
Apply for Power of Attorney
Apply for an ITIN
Rules Governing Practice before IRS

401(k) Plan Hardship Distributions - Consider the Consequences

Many 401(k) plans allow you to withdraw money before you actually retire to pay for certain events that cause you a financial hardship. For example, some 401(k) plans may allow a hardship distribution to pay for your, your spouse’s, your dependents’ or your primary plan beneficiary’s:

  • medical expenses,
  • funeral expenses, or
  • tuition and related educational expenses.

However, you should know these consequences before taking a hardship distribution:

  • The amount of the hardship distribution will permanently reduce the amount you’ll have in the plan at retirement.
  • You must pay income tax on any previously untaxed money you receive as a hardship distribution.
  • You may also have to pay an additional 10% tax, unless you're age 59½ or older or qualify for another exception.
  • You may not be able to contribute to your account for six months after you receive the hardship distribution.

Remember, a 401(k) plan is designed to help you save money for retirement. Consider the consequences before dipping into your retirement savings.

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