Traditional 401(k) withdrawals are taxed at the account owner's current income tax rate. Roth 401(k) withdrawals generally aren't taxable, provided the account was opened at least five years ago and the account owner is age 59½ or older. Depending upon the amount of your distribution your current income tax bracket may change as well.
Any taxable distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll the distribution over later.
Thank you for the question @bnrretire
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Marc T.
TurboTax Live Tax Expert
27 Years of Experience Helping Clients
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