401k penalty

queengate8 — Sat, 13 Mar 2021 21:07:31 GMT

I left my job and received money from my 401k and it was taken out as Covid relief

Do I have to pay 10% penalty since I am 58 and received this after I am no longer employed?

Re: 401k penalty

ColeenD3 — Sat, 13 Mar 2021 22:46:43 GMT

No.

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

You qualify if:

You, your spouse, or your dependent are diagnosed with COVID-19
You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
You had work hours reduced to COVID-19
You’re unable to work due to child care closure or hour reduction

The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes.

Re: 401k penalty

fanfare — Sat, 13 Mar 2021 23:20:31 GMT

It will depend on the date that you took out the money, which you did not state.

topic Re: 401k penalty in Retirement tax questions

401k penalty

Re: 401k penalty

Re: 401k penalty