Myself and about 600 other employees have been layed off perminiately. If I currently have a hardship and or a loan from my 401...what does off set and deemed
to take a distribution mean? and it states I'm deemed to income taxes due to early withdrawal....does this effect my severance...Please help to explain
Thank you
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what does deemed to take a distribution
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 jimjasmom |
what does deemed to take a distribution |
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Posts: 1 (05/14/09 14:21:35) |
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fender5150 |
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Posts: 140 (05/18/09 12:50:50) Contributing Member |
It shouldn't affect your severence pay, but it will affect your tax return at the end of the year.
The company is assuming you're not going to pay the money back. They're just gong to treat it like a pre-mature distribution: -You don't have to pay it back. -You'll get a 1099 at the end of the year for the written-off loan. -You'll likely be charged a 10% penalty, plus the distrubution will be taxable on your tax return. Hope this information helps! |
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