Does 401 k loan mean having distributions from a retirement acct?

Does taking out a 401k credit loan mean I have taken out a distribution from a retirement plan?

posted

No. The beauty of a 401k loan is just that - it is NOT treated as a distribution. No need to report your loan.

If you default on the loan repayments though, your 401k administrator may re-classify the loan as a distribution and send you a 1099-R to report and pay taxes on.

Hope this helps.

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