HThackneyco
Jan 29, 2010, 09:10 AM
If you take a hardship loan out of your 401-k and pay taxes at the time of loan, do you still get a 1099
ebaines
Jan 29, 2010, 10:42 AM
If it's a loan, then there are no taxes due at all, and you will not receive a 1099-R. However, since you used the word "hardshp" and you mention that taxes were paid at the time of the "loan," I am assuming that this was actually a withdrawal, not a loan.
For hardship withdrawals they would have withheld 20% for income tax purposes at the time of the withdrawal. They will send you a 1099-R form to document the withdrawal. You include the amount of the withdrawal as income on your tax return on line 16 of Form 1040 ("Pensions and Annuities"). If you are under age 59-1/2, you will have to include the 10% early withdrawal penalty as an additional tax owed (on line 58, "Additional tax on IRAs, other qualified retirement plans"), and you include the amount of tax that was withheld on line 62 along with your other withholding for your pay ("Federal income tax withheld from Forms W-2 and 1099"). There are a few exceptions to the 10% penalty - if you are disabled, or used the funds for medical purpose, or made the withdrawal due to a domestic relations order, for example.