DWQA QuestionsCategory: UnemployedIf I make withdrawals from my IRA or 401k, does this count as income?
HealthTNHealthTN Staff asked 5 years ago

If I make withdrawals from my IRA or 401k, does this count as income?

1 Answers
HealthTNHealthTN Staff answered 5 years ago

It depends on the kind of account you’re withdrawing from. Generally, the amount of your income from a retirement account distribution depends on the type of retirement account, how much you contributed to it, and whether you were already taxed on the amount you contributed.

Withdrawals from a traditional IRA or SEP-IRA generally count as income. (If you made only tax-deductible contributions, all of it is considered income. If you made non-deductible contributions, see IRS Form 8606.)

Roth IRAs are different. Qualified withdrawals from a Roth IRA are not considered income. For more information, see IRS Publication 590.

Withdrawals from a 401k plan are generally counted as income (your pre-tax contributions, an employer’s matching contributions, as well as earnings, are included in income). But qualified distributions from a designated Roth account in a 401(k) plan are not considered income. For more information, see IRS publication 575.

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