If I receive a 401-k loan balance as a distribution after I turn 59 1/2, do I pay a penalty (even through I originated the loan before I turned 59 1/2)?

sajmills · ‎June 4, 2019

MinhT · ‎June 4, 2019

No, you do not have to pay the early withdrawal penalty if your deemed distribution for your loan occurred after you have reached age 59 1/2, even if the loan origination took place before age 59 1/2.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

MinhT · ‎June 4, 2019

No, you do not have to pay the early withdrawal penalty if your deemed distribution for your loan occurred after you have reached age 59 1/2, even if the loan origination took place before age 59 1/2.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Expert does your taxes

Do it yourself

Resources

Support

Expert does your taxes

Do it yourself

Resources

Support

If I receive a 401-k loan balance as a distribution after I turn 59 1/2, do I pay a penalty (even through I originated the loan before I turned 59 1/2)?