turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

I took an early withdrawal from my 401K to pay a previous IRS tax year bill. Does this exempt me from the 10% early withdrawal penalty?

I received an IRS letter to pay the tax on the previous year,  not sure if this qualifies as an IRS Levy?
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies

I took an early withdrawal from my 401K to pay a previous IRS tax year bill. Does this exempt me from the 10% early withdrawal penalty?

To qualify as an exemption due to IRS levy, you must have received the IRS Notice of Intent to Levy CP 504.  

dmertz
Level 15

I took an early withdrawal from my 401K to pay a previous IRS tax year bill. Does this exempt me from the 10% early withdrawal penalty?

So, no, this was not an IRS levy.  Using a distribution paid to you to pay taxes is not an exception to the early-distribution penalty.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies