Taxes withheld from distributions for Former Employees

When you take a distribution from your deferred compensation accounts, you will pay taxes on the distribution. The amount of tax you pay depends on several factors:

• The amount you withdraw in a calendar year, and your income in that year
• The type of Plan you have – 401(k) or 457
• Your age and employment status

Basically, any amount you withdraw from your 401(k) account has taxes withheld at 20%, and if you're under age 59½, you'll be taxed an additional 10% when you file your return.

Any amount you withdraw from your 457 account has taxes withheld at 20%. However, if you select a periodic distribution over 10 years, then only 10% is withheld for taxes.