I'm not sure exactly who to send this to, Tax
as both apply, anyhow here is the question. My Current home was hit with Termites & Mold(would cost more to fix then it is worth, & Still paying off that loan)
I am trying to get a Hardship Withdrawal from my (Kroger) Merrill Lynch 401 K
account, They approved me with no issue there, Now Since I am not 59½ There is a penalty fee, not by them as it is for a Primary Purchase of a home in which they consider a hardship, But Irs that seems to be Yes & No answer. I know I have to pay taxes on anything I take out, but do they not consider purchase of Primary residence a hardship & wave the early withdrawal penalty? One article said yes. one said no.
I already have 2 loans out now, & even with a hardship from my 401 k will end up with a third. To cover taxes alone will take close to 15 % then if I get penalized on top of that it would be another 10% if you take 25% away from what you are getting that leaves nothing for the home. so in short. would IRS hit me with the penalty or No? Thanks for the help, sorry for the long message, just trying to explain the best I can.
Thanks again Tom