What the IRS allows
A plan may allow a hardship distribution because of an immediate and heavy financial need, limited to the amount necessary to satisfy that need. Plans are not required to offer them. Unless the employer knows otherwise, it may rely on your written statement that the need cannot be met from other resources.
Expenses that qualify automatically
| Expense (IRS list) | Note |
|---|---|
| Medical care | for you, your spouse, dependents or beneficiary |
| Buying your principal residence | costs directly related to the purchase, not mortgage payments |
| Postsecondary education | tuition, fees and room and board for the next 12 months |
| Preventing eviction or foreclosure | on your principal residence |
| Funeral expenses | for specified family members or a beneficiary |
| Repairs to your principal residence | certain expenses to repair damage |
What it costs
The IRS says hardship distributions are generally taxable as income, except for Roth contributions, and may also be subject to the 10 percent additional tax on early distributions. A $10,000 withdrawal at a 22% marginal rate, before 59½:
| Item | Amount |
|---|---|
| Income tax | $2,200 |
| 10% additional tax, if no exception applies | $1,000 |
| Kept | $6,800 |
Some exceptions to the 10 percent tax, such as unreimbursed medical expenses above 7.5 percent of AGI, are listed in early withdrawal penalty exceptions. The 2026 brackets show which rate applies.
Hardship withdrawal or plan loan
| Hardship withdrawal | Plan loan | |
|---|---|---|
| Taxed when taken | yes, plus possibly 10% | no, unless it becomes a deemed distribution |
| Paid back | cannot be repaid or rolled over | repaid within five years, at least quarterly |
| Needs a qualifying reason | yes | no, within the plan's rules |
Loan limits and risks are in 401(k) loans explained, and the 401(k) calculator shows what the withdrawn amount would have grown to. This guide follows the IRS page on hardship distributions; the plan document governs what a particular plan allows.
Frequently asked questions
What is a 401(k) hardship withdrawal?
A distribution a plan may allow because of an immediate and heavy financial need, limited to the amount necessary to satisfy that need, per the IRS. Plans are not required to offer hardship distributions; the plan document says whether yours does.
What counts as a hardship?
The IRS lists expenses that automatically count: medical care for you, your spouse, dependents or beneficiary; costs directly related to buying your principal residence, not mortgage payments; tuition, fees and room and board for the next 12 months of postsecondary education; payments to prevent eviction or foreclosure on your principal residence; funeral expenses for specified family members or a beneficiary; and certain expenses to repair damage to your principal residence.
Is a hardship withdrawal taxed?
Yes. The IRS says hardship distributions are generally included in income, except for any Roth contributions, and may also be subject to the 10 percent additional tax on early distributions. A $10,000 hardship withdrawal at a 22 percent marginal rate before age 59½ can cost $3,200 in federal tax.
Can I pay a hardship withdrawal back?
No. Unlike a loan, the IRS says a hardship distribution cannot be repaid to the plan and cannot be rolled over to another plan or an IRA. The money leaves the account for good.
Do I have to prove the hardship?
The IRS says that unless the employer has actual knowledge to the contrary, it may rely on your written statement that the need cannot be relieved from other resources.
Sources
General information based on the sources above, not tax, legal or financial advice.