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If i took out of my 401k due to illness , & job loss do i have to pay ny state taxes? the 401k was taken out?
twice the second time closed out.
Age 50, no other income
& would these circumstance also effect my federal taxes?
1 Answer
- cynic47Lv 61 decade agoFavorite Answer
You will have to pay Federal and NY state income tax on this distribution. There is also a 10% Federal early distribution penalty for taking the money out before age 59 1/2. There are some exceptions to the 10% penalty (but not the income tax itself), such as if you are permanently disabled or have medical deductions in excess of 7.5% of your adjusted gross income. Read more in IRS publication 575.
Source(s): http://www.irs.gov/pub/irs-pdf/p575.pdf