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Question about forced termination of 401k


chhejr

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I just received in the mail a check from my 401k from my previous employer ~$400. I had only been with the company for a very short period of time before quitting. I'd estimate it was only about 4-5 months. 

My question is. Is it possible to still rollover this cash into an IRA? It says that the distribution type on the statement attached to the check is "Termination Benefit", and the Distribution Category Code is 1. It shows that there was Federal withholding  taken on the total amount but no state withholding.

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You have 60 days to do a rollover.  It gets a little bit ugly if taxes were withheld...using your round number of $400 net received, the gross would be $500 with $100 of taxes withheld.  You can roll over the full $500 - the other $100 comes out of your pocket.  If you roll over $400, you will be taxed on the $100 that was effectively not rolled over because it went to the IRS.  

Ed Snyder

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