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    Avijalan's Avatar
    Avijalan Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Mar 30, 2008, 07:39 PM
    Early 401K distribution by Non-Resident
    I am a citizen of India and relocated from US to Singapore in 2006. I was employed in US on an H1B visa. In 2007, I took an early distribution of US$20,000 from my 401K account. The institution withheld 30% from my distribution and sent me a Form 1042-S. I will appreciate if someone could explain me the tax impact. Do I have to pay 30% + 10% penalty?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    May 2, 2008, 01:55 PM
    If you received a Form 1042-S (which may be the correct form, but it does not sound right to me), then you can probably just pay the income taxes due and avoid the 10% Early Withdrawal Penalty.

    What tax rate you pay depends on your overall income.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #3

    May 2, 2008, 07:02 PM
    I don't know what rule would take you out of the 10% penalty. I think you owe it.
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