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Tax Return Filing for Non Resident Alien 401K withdrawal with 30% Tax With Held?

I am a Indian National Living in India. In Sept 2020 I applied for 401K Withdrawal (Lump Sum payment). My Age is >60 Year. This withdrawal was for my working in US between 1997-1999. Along with my withdrawal request I also included my W8BN form. Even that 30% Tax withheld has been done my the Plan administration. I was told that I will get 1099R so that I can file Income tax Return. I understand that I need to file 1040NR form. Plan Admiration company mentioned that I will get 1099R in Jan2021. My Question is :

    1) Since I withdraw 401K after my Age 60, What is my Tax Liabilities? Withdrawal is the only US Income in 2020. I understand withdrawal of 401K is not taxable after the age of 59 and 1/2 year.

3 Answers

  • 3 months ago
    Favourite answer

    What you understand is not correct.

    Withdrawal from a 401K is taxable, at any age.

    After a certain age, you only pay tax, and no longer pay a 10% penalty.  Before that age, you pay a 10% penalty plus tax.

  • Bill
    Lv 6
    3 months ago

    Once you turn 59 and 1/2 there is no 10% penalty for making a withdrawal.  Income taxes are due on the amount withdrawn.  Depending on the amount you withdrew from your 401K, you will get some of the 30% back after filing a tax return.  If it's a tremendous sum, you may owe more.  I hope and pray that you and India are well.  I found India to be a most interesting and delightful country and hope to return someday.     

  • Anonymous
    3 months ago

    The money in your 401K was deposited "tax deferred".  No income tax was paid on it.  Once it's pulled out, it becomes taxable at the current rates.  You'll need to file so that the IRS gets their money.

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