TaxConnections

Login | TAXPAYERS | TAX PROFESSIONALS-START HERE
Ask Tax Question

Is there tax due on an inherited 401k, either state or fed income tax? Can I roll this over to an IRA without having to pay taxes on it? Do I have to include this amount at probate. I live in Penna. Does an inherited annuity get handled the same way?

401(k)
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
John Stancil
You will have to pay Federal income tax on withdrawals from the 401(k). State laws vary, in some states, it would not be taxable. Pennsylvania does subject withdrawals to taxation.

If you are inheriting the 401(k) as a spouse, you may roll it into an IRA. If you are not a spouse you must take withdrawals, either a lump sum, or payments over a period of time. You will be subject to income tax on those withdrawals.

There are a host of types of annuities. If it was a tax deferred annuity, meaning that the decedent did not pay tax on the earnings, portion of the annuity withdrawals would be taxable. If it was a qualified retirement plan, all of the withdrawals would be taxable.
Leave a Comment 191 weeks ago



Meet Leading Tax Advisors

User Photo John Stancil

Lakeland, Florida, USA

Tax Advisor/CEO

User Photo Peter J. Scalise

New York, New York, USA

Federal Tax Credits & Incentives Practice Leader

User Photo John Dundon, II EA

Denver, Colorado, USA

Tax Director

 

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

NEVER MISS AN ISSUE OF TAXCONNECTIONS

 

Learn from tax advisors, straight to your inbox

Contact Us Today