Hardship Withdraw from 401(K) Plan

[Guest jkrad]

When taking a hardship withdraw from a 401(K) plan for the purchase of a primary residence can the participant elect not to have 20% withheld?

[FundeK]

A hardship withdrawal, regardless of what it is used for, it not an eligible rollover distribution. A distribution that is not eligible for rollover is not subject to the mandatory 20% withholding.

In answer to your question, yes, the participant can elect to have less than 20% withheld. Of course, if they have a hardship, and take a distribution without any withholding, they may find they have an even bigger hardship come tax time!