Do I have to pay back 401k withdrawal with CARES Act?
Hi, I spoke with a representative from a Wells Fargo who said I could take out my 401k penalty free, and they would take the taxes out now if I wanted, but he said he didn’t think I had to pay it back. I also read many articles mentioning that you may have to pay back the amount within three years and if not you may have to pay the penalty. Does anyone have any clarity on this.
- Anonymous3 months agoFavorite Answer
You do not have to pay back a 401k withdrawal if it meets the criteria of the CARES Act.
The three years refers to the amount of time you have to pay the federal income tax on your withdrawal.
- babyboomer1001Lv 73 months ago
Generally, there is a penalty for early withdrawal. If he is willing to not charge you - great. Paying taxes when you take out the money is NOT an option. It is not an "if I wanted" type of thing. Consult a lawyer about the current law on having to pay it back.
- Wayne ZLv 73 months ago
There are two options:
1) Withdraw the money and pay the tax and be done with it.
2) Withdraw the money, pay the tax and pay the withdrawal back within the next three years and get the tax paid back.
- BillLv 63 months ago
Go to www.irs.gov. It looks like you can make a withdrawal without penalty if you have been adversely affected by the pandemic (lost your job or got sick).