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payed off houseloan with 401k withdrawl

Forum|Forum|5 years ago
March 1, 2021
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payed off my house loan with a withdrawl from my 401k. no early withdrawl penalty since I was 64 yrs old when I did this. Was on an Obamacare plan from healthcare.gov since I was laid off and received unemployment for the whole of 2020 and 16468.20 tax credit for the health insurance. Turbo tax says that I am responsible to pay back the 16468.20 since they are counting the 401K withdrawl as income. Do I have any recourse to this?

I did have federal and state taxes taken out when I made the 401K withdrawl

Best answer by ColeenD3

The 401k distribution is indeed income and your unemployment is as well. Form 8962 calculates the amount of Premium Tax Credit. If you underestimated your income, you are not entitled to the amount of credit based on the amount you gave the Marketplace.

ColeenD3Answer

The 401k distribution is indeed income and your unemployment is as well. Form 8962 calculates the amount of Premium Tax Credit. If you underestimated your income, you are not entitled to the amount of credit based on the amount you gave the Marketplace.