topic My husband was let go from his previous job and took money out of 401k will we be taxed on that this year i have not recei ved anything except its noted on his W2 in Retirement tax questions

My husband was let go from his previous job and took money out of 401k will we be taxed on that this year i have not recei ved anything except its noted on his W2

anickell52 — Wed, 28 Jan 2026 06:07:22 GMT

Re: My husband was let go from his previous job and took money out of 401k will we be taxed on that this year i have not received anything except its noted on his W2

DoninGA — Thu, 30 Jan 2025 23:18:56 GMT

If the distribution from the 401(k) account occurred in 2024 then he should be receiving a Form 1099-R from the plan administrator. Those are usually mailed out in January or early February. The amount withdrawn is entered on your federal tax return as ordinary income and taxed at your current tax return.

If he was under the age of 59 1/2 or under the age of 55 when he separated from the company, the amount withdrawn in subject to a 10% early withdrawal penalty. This is assess as a tax lability on the federal tax return.

Re: My husband was let go from his previous job and took money out of 401k will we be taxed on th...

Vanessa A — Thu, 30 Jan 2025 23:21:11 GMT

It depends. If he is under 55, then yes, you will have to pay a penalty on this withdrawal if it was not rolled over to another qualified plan within 60 days. It will not be reported on a W2, instead you should receive a 1099-R from his retirement plan administrator.

If he is over 55, and eligible for retirement or over 59.5, then no you would not have a penalty on the withdrawal as this would be one of the exceptions to the withdraw penalty.

Re: My husband was let go from his previous job and took money out of 401k will we be taxed on that this year i have not received anything except its noted on his W2

Opus 17 — Thu, 30 Jan 2025 23:32:33 GMT

1. Withdrawals are always taxable. However, withdrawals are not reported on the W-2, only deferrals (contributions). Withdrawals are reported by a 1099-R from the plan administrator. Check online or it should be in the mail soon.

2. Withdrawals can be rolled over into another retirement plan (new employer plan or private IRA) within 60 days, this allows them to continue to grow tax-free. If you don't rollover the funds, they are taxable.

3. Withdrawals are also subject to a 10% penalty unless your spouse was age 55 or older when they separated from service.

4. There are a few exceptions to the 10% penalty but general unemployment is not one of them. The list of exceptions is here.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions