When is my 401(k) distribution taxable?

If I requested a 401(k) distribution in December 2022 and received a trade date in 2022 for my investments, but the check was not processed until January 2023.

Would the trade date or check date dictate which tax year the distribution should be attributed to for the purposes of receiving a 1099?

posted

If you have not yet received a 1099-R for that distribution it’s likely considered a 2023 distribution but your financial institution can certainly confirm that.

Income is taxed based on when it becomes available for use. Since you did not receive the check until January, that would determine the taxable year. It is not based on when it was cashed, instead, when it was available for you to cash.

Reference: What is Taxable and Nontaxable Income? - IRS

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