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February 22, 2022
Question

I no longer work a company and took out my 401 k, do i still have to pay the additional tax?

  • February 22, 2022
  • 2 replies
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2 replies

February 22, 2022

If it was a premature distribution, one before normal retirement age, then you do need to pay tax on it plus a penalty for the early distribution. It doesn't matter that you don't work for the company anymore.

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Employee
February 22, 2022

In some cases, you can leave your 401(k) balance with the plan even after you separate, so that you can grow your retirement.  Sometimes you can roll it over into the plan at your new employer.

 

If you took a simple withdrawal, you had 60 days to contribute it to an IRA as a tax-free rollover contribution, to grow your retirement savings.  If you kept the money, you owe income tax, plus a 10% penalty if you are under age 55.