QUESTION:
If I have a solo 401k I can withdraw funds with no penalty or taxes as long as I pay it back within 3 years and a day is that correct?
ANSWER:
If you qualify to take a CARES Act solo 401k distribution, you can take a distribution up to 100% of the balance not to exceed $100,000. You can spread the taxes over 3 years and if you pay back the loan within 3 years and a day of the date of the distribution, you will not owe any taxes or penalties. If you pay back the distribution in Year 3, you will need to file an amended to obtain a refund of the taxes paid in Years 1 and 2.
If I have a solo 401k I can withdraw funds with no penalty or taxes as long as I pay it back within 3 years and a day is that correct?
ANSWER:
If you qualify to take a CARES Act solo 401k distribution, you can take a distribution up to 100% of the balance not to exceed $100,000. You can spread the taxes over 3 years and if you pay back the loan within 3 years and a day of the date of the distribution, you will not owe any taxes or penalties. If you pay back the distribution in Year 3, you will need to file an amended to obtain a refund of the taxes paid in Years 1 and 2.
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