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    kigsby's Avatar
    kigsby Posts: 1, Reputation: 1
    New Member

    Oct 29, 2007, 05:16 PM
    Previous job sent 401k rollover, with taxes taken out
    I left my job and started a new job. I wanted to receive my 401k funds and roll them over to another 401k. I received the check and it had taxes taken out. I call the company and was told the information my HR rep told me was incorrect and my funds were considered a distribution rather than a rollover. They told me they can not void and reissue the check (it has not been cashed). They said I need to deposit the check in my new 401k along with the amount of taxes that were taken out, and I would receive the tax money back when I filed my income taxes. That's almost $2000 I have to come up with because my old company told me the wrong information. Is this correct? Is there no way to get the company to void the check and reissue a new check as a rollover instead?

    Thank you
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man

    Oct 29, 2007, 05:22 PM
    You need to talk to the plan admins. I see no reason you can't retunr the chack and have them do a plan to plan rollover.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307

    Oct 30, 2007, 06:58 AM
    To make things even worse - the 20% they withheld counts as a premature distribution to you - so if you don't come up with the $2K and only roll what they sent you into your new 401(k) ,you will owe a 10% penalty on the part they withheld (plus whatever difference may be required to bring the 20% they withheld up to your true tax bracket). So their mistake could be a double whammy to you. One other thing - you have 60 days to get this resolved, so don't delay. Lesson learned - when moving 401(k) plans always do a direct rollover, so that you never personally receive a check. If a direct rollover isn't possible into your new 401(k), then consider rolling it directly to an IRA instead. Good luck!

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