Say a participant required to take a minimum distribution under 401(a)(9) also wants to take a distribution of $10,000 (this additional distribution does not completely wipe out their account balance). As we understand the rules, the MINDI portion of the distribution is subject to the withholding rules applicable to periodic payments and the extra $10,000 distribution is subject to the withholding rules applicable to eligible rollover distributions. Periodic payments are subject to the same withholding rules applicable to wages, but the payee (the participant) has the option of electing no withholding. Assume the participant wants to elect no withholding with respect to the MINDI portion of the distribution. How do they go about making that election?
Are TPAs using their own election forms or do they require the participant to complete Form W-4P (a withholding certificate for pension and annuity payments)?
Thanks in advance for any help.