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    seahawk.jerry's Avatar
    seahawk.jerry Posts: 2, Reputation: 1
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    #1

    Oct 28, 2010, 12:13 PM
    401K cashout for a non-US citizen no longer in US
    I am a non-US citizen who left the US in 2007. On talking to my 401K administrator, I was told that I could cash out my 401K but 20% would be automatically deducted for tax purposes. Is there any way I could retrieve the 20% (or a part of it)? I used to pay my taxes as required when I was working/living in the US but have not filed since.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Oct 28, 2010, 12:27 PM

    No - remember that a 401(k) paln is actually a deferred compensation plan. So when you take a withdrawal you are essentially being paid the salary you deferred, plus earnings that have grown tax-deferred. Since you didn't pay taxes on this money when you first earned it, now that you're making a withdrawal the tax bill becomes due. There is no free lunch.
    seahawk.jerry's Avatar
    seahawk.jerry Posts: 2, Reputation: 1
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    #3

    Oct 28, 2010, 12:47 PM
    Comment on ebaines's post
    Ah, was wondering if the 20% was residency based. Appreciate the response.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Oct 28, 2010, 01:38 PM
    No, the 20% is actually just a down payment on the tax that will be actually due.

    Given the 10% Early Withdrawal poenalty plus regualr taxes due, it could be as high as 45%.
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