dmertz
Level 15

Retirement tax questions

The Vanguard form that you describe appears to be for removing excess contributions made to the 401(k), not for a return of contribution from an IRA.  You probably need a different form for the IRA.

 

If your Roth 401(k) employee contributions are not excess contributions, you are not permitted to take them out until age 59½ or becoming disabled, except as a hardship distribution.  A hardship distribution from the Roth 401(k) will be a proportionate mix of your contributions (nontaxable) and gains (taxable and subject to a 10% early-distribution penalty).  This would not be a return of contribution, so there is no attributable net income calculation the way there would be with a return of contribution from the IRA.

 

With regard to a return of contribution from the IRA, the SECURE 2.0 Act eliminated the 10% early-distribution penalty on the taxable attributable net income.

 

Form 8606 is not involved with either of these types of distributions.

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