401K - special tax break for unemployed?

Here are two exceptions you may qualify for.

1. If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. You are a qualified public safety employee if you provided police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50.

1. A distribution from a qualified retirement plan to the extent you have deductible medical expenses (medical expenses that exceed 7.5% of your adjusted gross income), whether or not you itemize your deductions for the year.

You can find the full list of exceptions in IRS Pub 575:

Please note that you should not confuse the exceptions for an IRA distribution with the exceptions for a pension distribution. They are not the same.

have been unemployed for a

...

But presumably since the OP is unemployed, he should be able to roll over the 401K into an IRA. And that would then qualify for the IRA rules, right?

IIRC there is the "substantially equal payments" exception that would allow penalty-free (but not tax-free) withdrawals. The OP would have to continue the withdrawals until age 59 1/2 or for 5 years, whichever is longer. And the payment schedule can't be changed once started without penalty consequences.

There is no way to avoid regular income taxes on withdrawing from a

401K or IRA. Well, if some of the contributions were after tax contributions -- not very likely -- then a portion of the withdrawal might not be taxed.)