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General/Taxability Issues including Distributions, Early Withdrawals, 10% Additional Tax, Defaulted Loans

  1. This is the first year that I received a distribution of benefits from my retirement plan. Are any of my benefits taxable?

  2. I received a lump-sum distribution when I retired. Is there any special tax averaging option on a lump-sum distribution?

  3. If taxes are withheld from a distribution from a 401(k) plan, am I required to include the amount of the distribution as income and also pay the 10% additional tax?

  4. If I retire or leave my employer for any reason (including due to being laid off) before I am age 59 1/2, can I withdraw my vested benefits under that employer's 401(k) plan, without having to pay a 10% additional tax? What if I were 55 or older when I separated from service with my employer?

  5. I changed jobs and received a distribution of my entire vested account under my former employer's 401(k) plan. The plan withheld 20% of my account balance for Federal Income Taxes. Within 60 days of receiving the distribution, I rolled over the distribution to my current employer's 401(k) plan. Since taxes were withheld from the distribution, do I have to include that money in income?

  6. Can I withdraw my elective deferrals from a 401(k) plan to build or purchase my first home without paying the 10% additional tax on early distributions?

  7. Does the 10% additional tax on early distributions apply if I am over age 55 and default on a loan through my 401(k) plan when I have a separation from service with my employer?


Category:  Pensions/Annuities/Retirement Plans (i.e., 401(k), etc.)


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Page Last Reviewed or Updated: February 06, 2012