Hi for those who got let go and got outstanding loans from your 401k. My question is if I got layoff do I still need to make payment or they will deduct from your balance. Per policy got confused mention sometimes keep making payments. Please any advise will be helpful Thank you
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I can answer - 100% sure since it’s my current issue. If a lament is not made within 90 days, the loan defaults and anything due is income. They will not take any taxes so the taxes and penalty, if under 59 1/2, are yours for the next tax year.
You can pay it back or just pay taxes on it the following year. Your choice.
I was laid off this past Feb. I had a 401k loan and they took just interest on the loan when I was laid off.
it was my understanding it depended on the amount of the loan if you were allowed to continue with payment or had to pay in full but then again, things change all the time. you are best to follow up with HR
At. @bop+1pop07tB Thank you for responding. Sorry one more question so recently I took a loan for $20k. So you will be making payment back after you get let go? Or you will need to do lump sum ; Just trying to understand since is part of the 401k. I think will take taxes cut ty
When I was let go, I had to pay the full outstanding balance off or take a tax hit when you file taxes.