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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1304
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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I have a mass mutual retirement. I own a home that is in

Customer Question

I have a mass mutual retirement. I own a home that is in need of repair to keep within code of park we reside in . May I use my 401 to repair the home?
JA: The Accountant will know how to help. Please tell me more so we can help you best.
Customer: The city code requires we need a new roof. Cost is $5,00.00. May I use my 401 under hardship terms?
JA: Is there anything else the Accountant should be aware of?
Customer: Not that I can think of.
JA: I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.
Submitted: 1 year ago.
Category: Tax
Expert:  Mark D replied 1 year ago.

Hello. Assuming you meet no other exemptions, like age or disability, repairs needed for a personal home do not fall under allowable exemptions for the 10% early withdrawal penalty for a 401K. However, your plan provider may allow a hardship distribution for the documented expense you noted. Just remember, the distribution would be both taxable and subject to an early withdrawal penalty (penalty only if under age 59.5). Does this answer your question?