Ask Experts Questions for FREE Help !
Ask
    Jbert's Avatar
    Jbert Posts: 56, Reputation: 1
    Junior Member
    		  
    #1

    Oct 10, 2006, 09:20 PM
    401K Penalty 10%
    Hi,

    I lost my job of 30 years this year due to disability. I have been awarded Social Security Disability. Approved in Feb 06, first payment was August 06. I had 2 withdrawals from my 401K. The first had a 10% penalty, the 2nd did not because of the disability. My question is:

    Is the disability retro active for the whole year or just from the approval date. If the 1st disbursement was after the disability approval date can I get a refund on it.


    Thanks


    Jim
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Oct 11, 2006, 06:37 AM
    You should be able to get it back if it was AFTER the approval. But what I suspect will happen is that the 10% will just be used as a credit against your tax liability for the year.
    Jbert's Avatar
    Jbert Posts: 56, Reputation: 1
    Junior Member
    		  
    #3

    Oct 11, 2006, 02:00 PM
    Thanks Scott,

    On the present Disability structure every penny will help. I will check out the dates as you suggested.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Oct 11, 2006, 03:53 PM
    If you can show that you were disabled the day you left your job, you should be able to get the 10% penalty back with little problem.
    Jbert's Avatar
    Jbert Posts: 56, Reputation: 1
    Junior Member
    		  
    #5

    Oct 11, 2006, 04:16 PM
    Thanks ATE. I will check dates. The disability law says there is a 5 month wait on funds. So if I got my first check in August, counting back 5 months would be March, so approved in Feb. Will look up date on money received into rollover as the disbursement was at the same time.

    Thanks again


    Jim
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Oct 12, 2006, 05:57 AM
    Glad to help!

    Remember that you become disabled when you got injured, NOT when SSA says you were disabled.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

401K cashed out - 10% Penalty? [ 6 Answers ]

Well we had no choice but to take out our 401K We had rolled it over when my husband switched jobs. We thought we couldn't touch it because we didn't fit the criteria but the secretary at the retirement place said she found a loop hole and we could cash out the rollover amount at least just not...

401k penalty [ 2 Answers ]

First time homebuying classifies for the non pentalty right? How do they tax, before you receive it or add it to your yearly income come tax time.

401K Distribution penalty [ 3 Answers ]

I had no choice but to take a hardship withdrawal from my 401K after being let go by my employer. It was a difficult time also having been displaced by a house fire and having to rebuild our home and pay for a portion of our alternate living expenses not covered by the insurance company. Being a...

401k penalty payment [ 5 Answers ]

Hello, This past year I liquidated my 401k and am not eligible for a waiver for the 10% penalty. I used turbo tax to file my taxes and while turbo tax did put me through a questionnaire that resulted in it saying I owed a penalty, it never subtracted the penalty or told me how to go about paying...

Cashing in 401k penalty [ 0 Answers ]

In 2002 I cashed in a 401k and received about 14,000. I knew about the taxes but didn't know for sure I would receive a penalty because everything I read said I "may" and I figured they would let me know... anyway, I owed the IRS 1,800 and they put me on a pmt plan of $25 to federal IRS every month...

View more questions Search