pthomann
May 29 2001, 10:51 PM
Are there any exceptions to the 20% withholding rule for partcipants of a DB plan who rollover their contributions? For example: a DB plan member is issued a check at retirement directly from the pension plan and no tax is withheld. Are some government plans permitted to not withhold?
b2kates
May 30 2001, 08:32 AM
lump sum distributions eligible for rollover are subject to mandatory 20% withholding IRC 3405©
If it is not rollover eligible then the 20% withholding does not apply.
pax
May 30 2001, 10:40 AM
And don't forget that more states are jumping on the withholding bandwagon. This is a pretty good summary:
http://www.cigna.com/professional/pdf/CPA_iidw0201.PDF
But it may be out of date. For example, now NC and VA both have 4% withholding.