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401k cash out taxes
I am an Australian who was working in the US for a number of years on a visa. Last year I moved back to Australia and cashed out my 401k while I was a resident of Australia. I am under 55 years old.
Is this income taxable in the US or can I claim Article 18 in the US/Australia tax treaty meaning that it is taxable only in Australia (and excluded from US tax)? I was living in California before moving to Australia. Is there any state tax payable? |
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The 401K distribution is considered to be deferred compensation that was tax-deferred and thus IS subject to U.S. income tax. You will need to file either Form 1040 (if you choose to file as a resident) or Form 1040NR with Form 1040 (if you file as a dual-status alien) and pay normal income tax plus the 10% Early Withdrawal Penalty.
If you wait until AFTER you left California before making withdrawal, then no California income tax will be due. |
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