@Bwill2288 wrote:
@Opus 17 Is this true for married couples filing joint or can both parents only withdrawal if they are filing separately? For ex:
- baby born in Feb 2024
- dad takes out 5k from his regular 401k June 2024
- mom takes out 5k from her Roth 401k June 2024
- they file married/joint
How would the above be penalized/taxed?
IRAs and 401(k)s are always owned by individuals, they are never joint. So whether you file separately or jointly, each spouse is allowed to withdraw up to $5000 for new child expenses from an account they individually own, as long as it is after the birth and within 1 year. The income will be added to any other income and taxed as ordinary income, but there will be no additional 10% penalty.
