Is 401K Considered Income? 
Money that is received from a 401 -LRB- K -RRB- plan is considered income in the year it is received . The money contributed to the plan was tax deductible for you , the participant , and the employer . The accumulated earnings on the money have always been tax deferred . It is when the funds are withdrawn that all that deferred money becomes taxable . Retirement income planning is important if these types of funds comprise a major source of income for you . 