The IRS has very specific 401(k) withdrawal rules, and breaking them can cost you a 10% penalty on top of regular income taxes. FAQs About 401(k) Withdrawal Rules Here are the answers to some of the most frequently asked questions about 401(k) withdrawal rules and how they work: When can I withdraw from my 401(k) without penalty? Traditional 401(k) withdrawals are taxed as income; Roth 401(k) withdrawals are tax-free if qualified.