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    Shirley Gregg's Avatar
    Shirley Gregg Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Nov 27, 2006, 08:00 PM
    401K to pay taxes
    Is there a penalty for early withdraw on a 401k to pay a past tax lien?
    Shirley Gregg's Avatar
    Shirley Gregg Posts: 2, Reputation: 1
    New Member
    		  
    #2

    Nov 27, 2006, 08:05 PM
    Quote Originally Posted by Shirley Gregg
    Is there a penalty for early withdraw on a 401k to pay a past tax lein?
    Is there a penalty for early withdraw from a 401 K when the money is used to pay a state tax lean
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Nov 28, 2006, 06:08 PM
    Yes. Paying off state taxes will NOT exempt you from the 10% early withdrawal penalty.

    An IRS levy, on the other hand, will qualify for for an exemption.
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