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

    Apr 7, 2009, 08:35 PM
    401k loan 2008
    I took a 10,000 loan from my 401k in 09/08 pending medical expenses. I was laid off 12/08, no more payroll deductions for payment, loan will default end of this month. Do I count it as income for 2008 and pay penalties for early withdrawal or 2009 when it defaults?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Apr 8, 2009, 05:55 AM

    You haven't received a 1099-R for a withdrawal in 2008, have you? The loan is reclassified as a withdrawal when you default on the loan. So that would be in tax year 2009. You should receive a 1099-R in January 2010 that will document the withdrawal, for use in preparing your 2009 taxes at that time.
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