401k distribution taxable to the State (Ohio)

Forum|Forum|4 years ago
May 17, 2022
1 reply
8 views

Taxpayer took out $450k from his 401k to purchase a house in Nevada. Problem is that he still lived in Ohio when he took the distribution and deposited the funds in his bank account in Ohio. (About 2 months before he moved to Nevada). Taxes due for Ohio plus City plus School District are substantial. Are we stuck or anybody any suggestion how to avoid paying the State and City tax. All of the distribution of the 401k was used to buy the house in NV. Would there be any exception reporting the income to the state in a case like this. Better planning would have avoided all this of course, but here we are.

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Best answer by George4Tacks

"Better planning would have avoided all this of course, but here we are." That is your answer. Clients often do things without consulting. Pension is taxable to the state in which they live at the time of the distribution. They could have taken a 401K loan and then paid that off when they were in Nevada, but as the saying goes "Hindsight is 20/20"

George4TacksAnswer

Level 15

"Better planning would have avoided all this of course, but here we are." That is your answer. Clients often do things without consulting. Pension is taxable to the state in which they live at the time of the distribution. They could have taken a 401K loan and then paid that off when they were in Nevada, but as the saying goes "Hindsight is 20/20"

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