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Asked 3/5/2009

If I pay back a loan 100% in one lump sum do I have to pay taxes on it?

I took out a loan from my 401K then lost my job. I was told if I paid back the full amount I would not have to pay a penalty or taxes on that money. Is this true? If so how long do I have to pay it back?

 
 
 
 
 
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Answer 1/1 - Submitted 3/5/2009

You have to pay it back before it is deemed distributed, and reported to the IRS as a distribution. Usually you only have about 90 days to do this. Check with the administrator of your plan.

 
 
 
 
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