I have to have some of my 401K contributions distributed back to me, since they were incorrectly deducted from my salary by my employer before I was eligible for contributions.
Apparently my eligible date was Jan 09, but my contributions were started in Oct 08. My hire on date was Aug 13,08.


They are saying that I have to take a withdrawal ( i.e. - they are paying the contributions back to me that occurred between Oct 09 and Dec 31 08), but cannot give back all that I put in, due to penalty and income tax. I am over 59 1/2 years old, and was so at the date of hire also.
What is your opinion on the amount that I should receive back? The amount I put in was over $5000.
Would it be beneficial for me to roll all or part of this into a rollover IRA instead? ( I would have to open the rollover account)
Your help is greatly appreciated.
Thank you.

jeepman44

They should refund your contributions back to you, and document it on a 1099-R form. They may indeed have to withhold 20% -you can't avoid that (remember, you never paid tax on this money in the first place). You are NOT subject to the 10% early withdrawal penalty, as this is merely a return of an ineligible conribution.

I have to have some of my 401K contributions distributed back to me, since they were incorrectly deducted from my salary by my employer before I was eligible for contributions.
Apparently my eligible date was Jan 09, but my contributions were started in Oct 08. My hire on date was Aug 13,08.


They are saying that I have to take a withdrawal ( i.e. - they are paying the contributions back to me that occurred between Oct 09 and Dec 31 08), but cannot give back all that I put in, due to penalty and income tax. I am over 59 1/2 years old, and was so at the date of hire also.
What is your opinion on the amount that I should receive back? The amount I put in was over $5000.
Would it be beneficial for me to roll all or part of this into a rollover IRA instead? ( I would have to open the rollover account)
Your help is greatly appreciated.
Thank you.

jeepman44


ebaines

Thank you for your response. This is exactly what is being done now.
Jeepman44 :)