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Level 3

Trade Act and 401k Loan question

I lost my job of 28 years recently due to a plant closure which fell under the Trade Act.  At the time I had a 401k loan out that I could not afford to repay, so I had to default on it.  Of course this blew up my income and now it's costing me.  Anyone know if there are any exceptions specific to the Trade Act that could help me out?

 

Thanks in advance Community.

 

Edit: I did not have to pay for health insurance with this money.

1 Comment
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Employee Tax Expert

Trade Act and 401k Loan question

I couldn't find any exceptions to the 10% early withdrawal penalty due to the Trade Act.  This link has a list of all exceptions to the penalty.  However, you will still pay Ordinary Income Taxes, even if you qualified for a penalty exception.