QUESTION: Does a loan from a solo 401k show on credit report?
ANSWER: The solo 401k with a loan feature is not dependent on the solo 401k participant’s credit record. Further, the solo 401k participant is essentially borrowing from his or her own solo 401k plan not a bank or credit union, so a credit check is not performed at time of loan. However, if the solo 401k loan defaults, the outstanding loan balance will be reported as a distribution on Form 1099-R and income taxes will need to be paid on the amount distributed.
