401(k) loan default question
My spouse took out a 401(k) loan from their employer in 2022 to help us afford a new primary residence. They are switching jobs at the end of the month and we won't be able to repay the unpaid balance by the tax filing deadline in April 2024, and therefore it will go into default. I understand that this will be treated as taxable income, but which tax year will it happen in? Will it be considered income for 2022 when we originated the loan, and we have to file an amended tax return? Will it be considered income for 2023 since that's when they switched jobs? Or in 2024 because we have until tax day in April 2024 to repay the unpaid balance?
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