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    sarojsharma's Avatar
    sarojsharma Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Nov 21, 2008, 02:36 PM
    Tax on Early withdrawal from 401k by a non resident alien.
    I am a citizen of India. Worked in US on H1 visa for two years and then 2006 & 2007 was in France studying for a degree in Business Management. In 2007 I withdrew $36000.00 to pay partly for my education expense from 401k account established while I was working in USA. I know the amount is taxable, but do I pay 10% penalty on $36000.00 or less education expense or none of the above.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Nov 23, 2008, 05:20 AM

    Yes, early withdrawal from 401K is subject to 10% penalty and the entire withdrawal is taxed as your income. The rule is same for residents and non-residents.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Nov 24, 2008, 10:39 AM
    The waiver of the 10% penalty for early withdrawal applies to withdrawals from an IRA, not a 401K.
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