distribution do over
Is there a way to have a do-over for a distribution taken out of a 401K. It is within the 60 day window. The client was terminated and panicked and took the money but has not spent any of it. it is with Citigroup and in the menwhile they have changed their fiduciary and the new fiduciary (hewitt) takes over on July 5. We called and they do not report to the IRS yet so there should be a window to fix. Do we have a chance?
Permalink Submitted by Alan Spross on Thu, 2009-07-02 01:39
Note: Please post this type question on the discussion forum section. Thanks.
Unfortunately, the distribution is irrevocable and in addition the IRS now has 20% withholding until next spring. Client needs to complete the rollover to an IRA within 60 days, and to avoid tax and early withdrawal penalty on the taxes, he would also have to come up with the amount of the withholding to eliminate the taxes and penalty.