Distributions from tax-sheltered retirement plans may be fully or partially taxable,depending on whether your account includes non-deductible contributions.

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Distributions from tax-sheltered retirement plans, such as traditional IRAs and 401(k) plans, may be fully or partially taxable depending on various factors, including whether any non-deductible contributions were made to the account. Non-deductible contributions are made with after-tax dollars and are not subject to tax upon withdrawal, whereas deductible contributions and investment gains are subject to income tax upon distribution. Therefore, if a retirement account includes non-deductible contributions, a portion of the distribution may be tax-free while the remaining portion is subject to income tax.

Distributions from Tax-Sheltered Retirement Plans May Be Fully or Partially