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Level 1
posted Apr 30, 2020 8:01:35 PM

401k Withdrawal under Cares Act - Withhold tax now or pay when I file?

Hi, I am filling out paperwork and there is a section for tax withholding. I was planning to claim the income over 3 years. Do I withhold 1/3 of the tax now or can I do no withholding and pay 1/3 when I file my taxes? It seems I should withhold 1/3 of the tax but looking for a definite answer. I don't want any penalties.

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1 Replies
Level 15
Apr 30, 2020 8:34:38 PM

if you don't want any penalties you should have the tax taken out.

You may not be able to do no withholding on a 401k.

and, make sure your custodian will allow you to withhold only 1/3 of 20%, they may not allow that either.