topic Re: 401k withdrawal in Get your taxes done using TurboTax

401k withdrawal

jmrrpr — Thu, 30 Apr 2020 20:34:11 GMT

In Nov 2019, my husb was notified by a previous employer that he had funds in a 401K. He left this employer many years ago to accept another job. We took a full distribution of the funds as means to help supplement the lack of my income as I was planning to leave my current employer without another job to go to... is this considered "separation from service " which would exempt us from paying the early withdrawal penalty...

thanks

Re: 401k withdrawal

RobertG — Thu, 30 Apr 2020 21:01:59 GMT

This is an unusual situation.

The code section only says that distributions which are made to an employee after separation from service after attainment of age 55 are exempt from the penalty.

So if he was over 55 when separated, he would seem to qualify.

Re: 401k withdrawal

jmrrpr — Thu, 30 Apr 2020 22:35:10 GMT

thanks...but he was much younger than 55 when he left this employer.....but over 55 when the distribution was taken...looks like we will owe the penalty........

Re: 401k withdrawal

fanfare — Fri, 01 May 2020 00:05:00 GMT

you can't use your job circumstances to affect his 401k distributions.