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. 

4 Answers

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  • Anonymous
    3 months ago
    Favorite 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.

  • 3 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.

  • 3 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.

  • Bill
    Lv 6
    3 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).  

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