401K early distribution for first home purchase?

My Client withdrew $10,000 from his 401k to purchase a home, but he closed on may of 2009. Since the purchase did not occur until 09 he paid the 10% tax penalty plus taxes for the 401k distribution on his 2008 income tax return. Can I amend his 2008 return to avoid the penalty? The money was used to purchase the house. Was there a time limit to close on the house in order to avoid the penalty?


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I do not believe you can avoid the 10% penalty for early withdrawal on a 401K.  Only on an IRA withdrawal of $10,000 for first time home buyer.

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