[USA] [401K] I was in a settlement for a class action lawsuit involving a 401k. I just received a 1099r. Box 7 has code "7"; I am under the age to withdraw without penalty. Will i receive a penalty? (lemmy.world)

submitted 9 months ago by acetanilide@lemmy.world to c/personalfinance@lemmy.ml

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Sorry for long title:

USA
in a state with no state income tax
my former employer (international corporation) messed up 401ks, resulting in class action lawsuit
settlement gave claimants <$20 each
just received a 1099r for this amount
box 7 = "7", which means normal distribution per IRS
I am under 59.5

I don't understand the table on the IRS website. Just wondering if there will be a penalty for this settlement "distribution" or if it is waived since it was part of a lawsuit. I usually do my taxes by myself so I don't have anyone to ask.

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[-] acetanilide@lemmy.world 4 points 9 months ago

Makes sense.

It's $20 (well less than that actually lol. Might go to McDonald's)

[-] dohpaz42@lemmy.world 11 points 9 months ago

They screw up your 401k, probably to the tune of millions, and you get McD’s out of it. God bless America. 🫡

this post was submitted on 05 Feb 2024

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