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New Member
posted Jan 7, 2023 4:43:44 AM

Does a 401 k loan count as a withdrawal

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3 Replies
Level 15
Jan 7, 2023 5:26:26 AM

No.  A loan from a 401(k) tax deferred retirement account is not classified as a withdrawal from the account.  You will Not receive a Form 1099-R for the loan.

Alumni
Jan 7, 2023 7:49:47 AM

Exception: if you cannot pay the loan back (the loan defaults), then the unpaid amount is considered to be a taxable distribution and you could face a 10% penalty if you are under the age of 59½.

Level 15
Jan 7, 2023 7:58:10 AM

ps....if you do get a form 1099R then it was not a loan but a withdrawal.  Some people in the past have been confused if they took a loan or withdrawal.