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    gamefuel's Avatar
    gamefuel Posts: 1, Reputation: 1
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    #1

    May 30, 2011, 10:54 PM
    Will early 401k withdrawal affect my son's financial aid next year?
    Due to financial hardship and loss of my job, I will be taking an early withdrawal of my 401k. Will this affect my son's college financial assistance for next year? I wasn't sure if it would show as gross income on my taxes?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    May 31, 2011, 08:28 AM

    The withdrawal will indeed show up as part of your gross income on your taxes. Whether it will affect your son's financial aid is impossible to tell without a lot more information. But in general it would be prudent to limit the amount you withdraw from the 401(k) to an amount less than the amount of wages you would have received from your job, so your total gross income should be less than it was last year, and consequently it shouldn't affect his aid.
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