My 18yr old son left a job in 2015 for another. He had maybe $100+ in the prior company's supplied 401k. Upon termination of his employment, they sent a distribution/termination notice with a check.
As we're doing his 2015 taxes, I'm unsure where to claim this "income".
If your son received the distribution in 2015, he would report it on line 16a. If he did NOT roll it to another plan or to an IRA within the 60 days, he will also report the taxable portion of the pension on line 16b. If the distribution was rolled over to another plan or to an IRA within the 60 day period, he will leave 16b blank. If his distribution does not qualify for one of the exceptions to the penalty for early withdrawal such as age 59 ½, disability or rollover to IRA, his distribution will be subject to the 10% penalty for early withdrawal and is reported on a form with his individual federal and state income tax returns. It is paid along with the income tax. I recommend that you speak to CPA or enrolled agent for the specifics on filing his returns as you need specific tax reporting advice that we do not provide. Please do not rely solely on our comments above.
Disclosure: The posted information is for informational purposes only. This message does not constitute an offer to sell or a solicitation of an offer to buy any security. All opinions and estimates constitute Karp Capital's judgment as of the date of the report and are subject to change without notice. Accordingly, no representation or warranty, expressed or otherwise, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or timeliness of the information contained herein. Securities offered through Infinity Securities (a registered broker-dealer, member FINRA, SIPC). Infinity Financial Services and Karp Capital Management are not affiliated companies.