My husband had $1400 in a 401k (most was contributed this year) he lost his job and it was rolled over into an IRA. We did not do the rollover within 60 days. he is disabled and will not be going back to work.

Here are my questions – 1. will we have to pay taxes on the 401K since it was not rolled over within 60 days. 2. if we cash out the IRA now, would we have to pay taxes on both the 401k and the IRA?

When you cashed out the 401k, 20% federal income tax should have been withheld from your distribution as a prepayment toward you tax liability. if you did not contribute the gross amount of the distribution within 60 days, it is taxable. You will report the 401k distribution as income, take a deduction for the $1400 I assume you contribute to an IRA, but then if you cash out the IRA in the same year, you will be taxed on that amount too. the distributions are added to your income and taxed at your normal income tax rate. the 20% withheld will be credited as a tax payment toward your overall tax liability. if you are under age 59 1/2, you pay an addtional 10% tax when you file your return.

You will be charged 10% penalty if the rollover happened outside the 60 day window, but only if your husband was younger than 59 1/2.
While you will be liable for state and federal income tasex on the $1400, you will also get a $1400 deduction from your net income for the new IRA. Therefore, it will be a wash on this income tax return.
You will be forced to pay taxes again, when you finally do cash this in.

did you roll it over into an IRA or did it just stay in the 401k? if you didn't specifically move it into an IRA, its still in the 401k and that's fine and not taxable. if you did roll it over, I'm not sure why you would have to roll it again within 60 days.

If you do cash it out, then yes, you will have to pay federal and state taxes on it, as well as a 10% federal penalty.

there will be 10% penalty no matter what
but if the amount is only $1400, how much is taxable will depend on how that impacts your total income
if you are married, filing jointly your non taxable income is $18700, so however much this increases that amount will be taxable, at least at the lowest rate currently of 10%
you still may be eligible for EIC, that is something only you can determine when you know your total earned income