How does this affect my Roth IRA or 401(k)?

The 12-411 process does not interfere with your ability to maintain or withdraw from a Roth IRA or 401(k). However, it does affect how those withdrawals are taxed — and what portion you may be eligible to recover.

Here’s the breakdown:

• If you take a distribution from a 401(k) or IRA, and federal income taxes are withheld, the 12-411 process will allow you to recover those withheld taxes through your lawfully filed return.

• However, if you take the withdrawal before reaching retirement age, you may incur a 10% early withdrawal penalty. This is not a tax, and it cannot be refunded through the 12-411 process.

Why not?

That penalty is imposed by your broker, custodian, or fund manager — not the IRS. These institutions collect fees from managing your retirement account and are financially incentivized to penalize early withdrawals. The penalty is how they recover lost revenue from annual management fees when funds are withdrawn early.

Summary:

• You can recover withheld taxes from 401(k) or Roth IRA distributions using the 12-411 process

• You cannot recover early withdrawal penalties, as those are broker-imposed fees and not governed by IRS refund policy

This process still offers substantial financial benefit by ensuring you keep more of what you withdraw, even if penalties apply.