401K early withdrawal penalty
When my husband and I bought our new home in 2005, we both withdrew money from our 401Ks. I took $5,693 of which they took 20% in federal income tax withheld and he took $8,000 of which they took 10% in federal income tax withheld. They are now coming back to me and saying we both owe the 10% penalty. My question is, if they only took 10% from him to begin with, why do they only want 10% more from him but they still also want an additional 10% from me when I already paid a full 20%? I also thought that using your 401K as a downpayment on a new home negated the requirement to pay the penalty. Please explain.