It looks like you're asking about using an early withdrawal from a Roth 401(k) to pay a tax bill.
- Early Withdrawal Rules: Generally, early withdrawals from a Roth 401(k) are not tax-exempt unless they meet specific criteria. You must be at least 59½ years old, and the account must have been open for at least five years. There is also a "rule of 55" exemption if you have left your job
- Taxes and Penalties: If you withdraw funds early, you may have to pay taxes on the earnings portion of the withdrawal, and a 10% early withdrawal penalty may apply
- The Good News: Post-Tax Contributions: If you withdraw only the post-tax contributions you made into the plan and not the earnings, that portion of the withdrawal is tax-free
For more detailed information, you can refer to these helpful IRS links:
