401k withdrawal

Forum|Forum|1 year ago
March 21, 2025
14 replies
79 views

When completing my tax forms i noticed that the amt of my non penalty 401k wd income carried over to the state form and plugged in a 20k subtraction under pension and annuities(pension and annuities income exclusions for local , state federal pensions) I don't believe I am eligible for this subtraction as this is not a pension (it is a 401k savings acct). I tried 2 different tax programs with the same affect. While it looks great as I would get alot more in a return, I dont wish to be penalized for the 1k difference if it is wrong . This.is for Nys

401K

DaveF1006

Level 15

To clarify, what state?

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Laf923 Author

Level 2

New york

Laf923 Author

Level 2

The code 7 normal distribution is usually people taking regular distributions. Periodic distributions doesn't necessarily mean every month. The question at this point, are they periodic distributions that qualify or not?

From Common questions and answers about pension subtraction

What is a periodic pension payment?

Periodic payments include substantially equal payments made at least once a year over the life of the employee and/or beneficiaries or for 10 years or more.

The program does ask if it was periodic payment or lump sum and what did you do with it. All of those questions are in the federal section. There is one question that is automatically checked none of the above and it would be easy to hit continue and go right past it.

So, if it is a periodic payment based on your 401k from a private employer, you qualify for the benefit. If not, you can amend.

Amy,

Someone from turbo tax live expert called me to followup on this and according to ger(yolanda) she stated that I am qualified as i fall under the first line

*periodic payments for services you

performed as an employee before you

retired;

She is saying that this pertains to my work as a paid employee and isn't referencing periodic payments of my 401k distributions.

I would have never interpreted that line the way she read and explained it however she was very confident this applies to my situation and what makes me qualified for the exemption along with meeting the age requirement.?