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    kschell100's Avatar
    kschell100 Posts: 1, Reputation: 1
    New Member

    Jun 1, 2011, 02:41 PM
    What is the Illinois state tax percentage for a 401k hardship distribution?
    I am taking a $10,000 hardship loan and want to have them take out the taxes up front so I don't owe anything at tax time. What should I have them take for federal and state (Illinois)?

    ebaines's Avatar
    ebaines Posts: 12,130, Reputation: 1307

    Jun 1, 2011, 02:56 PM

    The IL income tax rate is a flat 5%. Are you sure the administrator is willing to be told by you how much to withhold for taxes? In most cases when you take a withdrawal they will automatically withhold 20% for federal taxes and nothing for state taxes. Whether 20% is sufficient to cover federal income taxes plus the 10% early withdrawal penalty is impossible to say - it depends on your tax bracket.

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