If you withdraw early from the 401K retirement plan, you are not
required to pay any additional percentage of tax. Yes, really, the
rate of tax will be the effective rate of tax that is applicable to
you in the year of withdrawal. Provided you are not covered under
any exceptions to early withdrawals provided.
The list of exceptions are as follows,
- The distribution was made to your estate or beneficiary after
your death.
- The distribution was made because you are totally and
permanently disabled.
- The withdrawal was made to cover qualified post-secondary
education expenses.
- The withdrawal was made to cover deductible medical
expenses.
- The distribution was made to pay for an IRS levy.
- The withdrawal was a Qualified Reservist Distribution
(generally, one made after being called to active duty for 180
days).
- The distribution was made as an installment in a series of
equal and periodic payments over your life expectancy, or over the
life expectancy of you and your beneficiary or beneficiaries. If
the retirement plan is not an IRA, you must have left employment
before payments began.