A 401(k) loan allows you to borrow from the assets in your 401(k) account. These loans charge interest and are typically repaid through payroll deductions. If you leave your employer before the loan is fully repaid, the outstanding balance is usually due in full. Failure to repay the loan may result in it being treated as a taxable distribution, subject to ordinary income taxes and possible penalties. However, under the Tax Cuts and Jobs Act, if you repay the loan by the due date of your tax return for the year you left your job (including extensions), you can avoid taxes and penalties. For instance, if you left your job in 2020, you’d have until April 15, 2021, to repay the loan.