At the age of sixty, and on SSD, I asked for 401K distribution. 20% was withheld. Do I file standard 1040 to get refund? I read somewhere that I should not owe this tax because of disability. I read the tax form 5329, and it does not seem to be for me. Help!

Bipity123

Yes, you should file a 1040, and you will owe taxes on it. The investment company should send you a form 1099-R which will report the distribution to you a well as the amount of tax withheld - be sure to correctly report these on your 1040. Even though you are disabled you still owe income tax on the distribution - remember that money you put into your 401(k) has all been pre-tax, and the investments have grown over time without any tax due, so now that you are taking distributions the government wants its cut. Perhaps what you are thinking of is that if you had been less than 59-1/2 years of age when you took the withdrawal you could claim an exemption from the usual 10% penalty for early withdrawal because of your disability, but even then you would have still had to pay regular income tax on it.

Yes, the 401K distribution is taxable. It is reported on line 15 of form 1040. Even a part of your SSD may be taxable if half of SSD plus 401K distribution and other income exceeds a base amount, which is $25,000 for Single.

Agreed.