2006-10-30 06:33:18 · 3 answers · asked by jbjefferies 3 in Business & Finance ➔ Personal Finance
its actually a withdrawal so if i loose the job or quite is it just regualr income tax and a 10 % penalty
2006-10-30 06:51:16 · update #1
If it is an actual "loan" there are not any tax penalties you just have to pay the money back.
If it is "distribution" then you would have to pay regular income tax and a 10% penalty on the distribution.
One last thing. If you quit or lose the job with a 401(k) outstanding, you will have to imediately pay back the balance of the loan or the remainging balance will become a distribution.
2006-10-30 06:39:22 · answer #1 · answered by Wayne Z 7 · 0⤊ 0⤋
Be caraeful in taking hardship loan. Make sure if falls in the guidelines established by the IRS. Of course you will have to pay it back in the required time line, usually by payroll deductions plus interest, but the interest payment goes to your account.
We had a recent scandal at our company, nearly 100 people out of 900 lost their job because they applied for hardship withdrawals and the IRS investigated, and found it they were using the money for something other than required. So be very careful.
2006-10-30 07:28:44 · answer #2 · answered by Midwest guy 4 · 0⤊ 0⤋
loan $0 but must be repiaid in the time frame set
early withdrawl 50%
2006-10-30 06:35:40 · answer #3 · answered by golferwhoworks 7 · 0⤊ 0⤋