If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

By Denise Appleby AAA
A:

Although the participant may be eligible to withdraw the funds if a plan is terminated as a result of an acquisition or other similar transaction, this does not mean that the 10% penalty will be waived. However, the participant would qualify for an exception if he/she meets any of the requirements as listed under the Tax Code. Please see Page 29 of IRS Publication 575 for a list of exceptions.



For more insight, read Tough Times ... Should You Disturb Your Qualified Plan's Assets?



This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS

  1. What are the 403(b) contribution limits?

    Determine whether 403(b) contributions meet federal guidelines. Contribution limits to this retirement plan are determined ...
  2. Can I roll over a 403b plan?

    Learn whether distributions from a 403(b) plan can be rolled over, where they can be rolled over to and what the income tax ...
  3. What is the difference between a 408 (k) plan and a 401 (k) plan?

    Learn key differences between 401(k) and 408(k) plans. Employers provide different options to help employees save for retirement, ...
  4. Is a 408 (k) the same as a Simplified Employee Pension (SEP)?

    Find out the differences and the similarities between a 408(k) retirement plan and a simplified employee pension (SEP), and ...
RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Entitlement Offer

    An offer to purchase a security or other asset that cannot be ...
  3. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  4. Employer's Liability Insurance

    A product for employers that protects them from major financial ...
  5. Strategic Management

    The management of an organization’s resources in order to achieve ...
  6. Performance Management

    The management of employees, departments, and organizations to ...
comments powered by Disqus
Related Articles
  1. When Your Job Offers An Awful Retirement ...
    Retirement

    When Your Job Offers An Awful Retirement ...

  2. Top 5 Strategies To Pay For Elder Care
    Retirement

    Top 5 Strategies To Pay For Elder Care

  3. 10 Common Retirement Planning Mistakes ...
    Retirement

    10 Common Retirement Planning Mistakes ...

  4. Power Of Attorney: Do You Need One?
    Retirement

    Power Of Attorney: Do You Need One?

  5. Examples Of Using SWOT Analysis To Get ...
    Investing Basics

    Examples Of Using SWOT Analysis To Get ...

Trading Center