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Non-resident taxes cashing out a 401K.
I am a Canadian citizen. I worked in Florida for 15 years and have a pension plan still there. I have been out of the USA for 6 years now. If I cash in my 401K there, do I have to pay state or federal tax on that money? I think there is a 10% early withdrawl penalty, but I want to know what taxes on top of that I would have to pay?
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No state income tax in FL, so that's the good news. The bad news is that this is considered to be US-source income and so you have to file a US tax return and pay taxes plus 10% penalty on any withdrawal you take (assuming you are under age 59-1/2). The tax rate depends on how much US-source income you have. You will also have to report the withdrawal on your Canadian tax return, but you take a credit for taxes paid to the US. |
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