Log in

View Full Version : 401k Early withdraw hardship


gavhan
Feb 3, 2007, 08:31 AM
I had to take 17k for a hardship withdraw on my 401k. Will I have to pay federal taxes on this?

AtlantaTaxExpert
Feb 3, 2007, 10:34 AM
Yes, you will be subject to normal state and federal income taxes on the $17,000.

Further, unless your distribution meet one of the exceptions, you will also have to pay a 10% Early Withdrawal Penalty. The 10% penalty must be paid even if all your deductions would otherwise completely offet your other income. It is a rather punitive tax.