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jjbass951
New Member

Do I have to pay taxes on the gross distribution of my 401k if it was forfeited after leaving job?

All money from the 401k was forfeited due to me not managing it after I was terminated
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dmertz
Level 15

Do I have to pay taxes on the gross distribution of my 401k if it was forfeited after leaving job?

Certainly you do, unless you rolled the money over to another retirement account.  Since this distribution was eligible for rollover, there should have been 20% withheld for taxes, but that's usually insufficient to cover the entire tax liability resulting from the distribution.  Enter the Form 1099-R under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R),  then answer the follow-up questions as to what you did with the distribution.  Assuming that you did not roll this distribution over, TurboTax will include this distribution in your taxable income and apply any tax withholding shown in box 4 of the Form 1099-R as a credit against your overall tax liability.

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1 Reply
dmertz
Level 15

Do I have to pay taxes on the gross distribution of my 401k if it was forfeited after leaving job?

Certainly you do, unless you rolled the money over to another retirement account.  Since this distribution was eligible for rollover, there should have been 20% withheld for taxes, but that's usually insufficient to cover the entire tax liability resulting from the distribution.  Enter the Form 1099-R under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R),  then answer the follow-up questions as to what you did with the distribution.  Assuming that you did not roll this distribution over, TurboTax will include this distribution in your taxable income and apply any tax withholding shown in box 4 of the Form 1099-R as a credit against your overall tax liability.

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