Does Wisconsin have a penalty for cashing a 401k if your disabled?

babyboomer10012019-09-19T06:25:30Z

If your disabled what? You can always take the money out of your 401k. There is always a penalty for doing that too. Don't forget the taxes. You didn't pay them when you put the money into the account so you will have to pay it when you take it out.

Anonymous2019-09-19T00:55:11Z

See Wisconsin publication 126. If you are subject to a federal penalty for early withdrawal, WI will penalize you too, for 33% of the federal amount.

As usual Steven F and Curtis did not bother to look at WI publications before answering.

Be absolutely sure you meet the definition of permanently and totally disabled before taking the money.

STEVEN F2019-09-19T00:21:05Z

curtisports2 is correct. The penalty isn't by the state. If you are totally and permanently disabled, the 10% penalty for early withdraw is waived, but you still have to pay income tax on the amount withdrawn.

curtisports22019-09-19T00:15:10Z

The penalty for early withdrawal from tax deferred retirement plans including 401k is at the federal level. Wisconsin will almost certainly tax what you withdraw and it doesn't matter why you withdrew it.