Carl C
Nov 23 2002, 05:38 PM
If I make an early withdrawal from my 401K or traditional IRA (no special circumstances), I know there is a 10% penalty. But do I also have to pay the 7.5% (I believe that's the percentage) FICA/Medicare tax when I file my 1040?
Carl
Mary Kay Foss
Nov 23 2002, 06:34 PM
No you don't have to pay additional FICA tax when you make an early withdrawal from a 401k plan or IRA. Amounts deferred into a 401k plan are not subject to income tax, but they are subject to social security when earned.
Some states also impose a penalty tax on early withdrawals. CA has a 2.5% penalty. If you take money early you pay federal and state income tax, a 10% federal penalty and possibly a state penalty.