Max Loan Amount

[goldtpa]

I have an employee in a 401k with 100k. She wants to take a 50k loan. She also has another 401k from her other job with 120k. Can she take a second 50k from the other 401k? The two companies are not related and she is not an HCE in either company.

The IRS website says,

“Generally, if permitted by the plan, a participant may borrow up to 50% of his or her vested account balance up to a maximum of $50,000.

The participant must reduce the $50,000 amount, above, if he or she already had an outstanding loan from the plan (or any other plan of the employer or related employer) during the 1-year period ending the day before the loan. The amount of the reduction is the participant’s highest outstanding loan balance during that period minus the outstanding balance on the date of the new loan.”

Since the two 401ks are not related in anyway, it would appear that she could take two 50k loans. I am right?

[BG5150]

Yep

[12AX7]

Agreed, but she also has to pay them back !