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New Member
posted Jan 28, 2025 12:43:51 PM

I had a 401k through my employer and was recently laid off. The account balance was paid out to me in a check. What do I select for where is my distribution from?

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1 Replies
Level 15
Jan 28, 2025 12:56:43 PM

First, if you want to keep the money as a tax-free retirement fund, you have 60 days to deposit the check (or the same amount of money) in a privately owned IRA, this is called a rollover.

 

If you kept the check, the money is taxable and you will also owe a 10% penalty if you are under age 55.

 

You will get a 1099-R from the 401k, they don't have to mail them until January 31, but they might be ready early or they might be online, call the plan administrator if you can't go online yourself.   When you enter the 1099-R it should have the proper codes to show this is a taxable early withdrawal subject to the penalty.