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  1. I am doing a review of our state tax withholding and related practices and was curious if anyone had any comments/information on the following: The state tax withholding for Mississippi (MS) used to be mandatory on premature distributions at 5%? Now I am seeing some record keepers refer to this being optional. Does anyone know anything more about this that this may have changed?As a preparer of a 1099-R is there anything that needs to be done to the state copy for states where the retirement distribution is not taxable or does the participant/tax preparer need to know this. For example, retirement distributions to participants of retirement age in Mississippi and Pennsylvania are not taxable. The employer source of distributions to residents of Hawaii are not taxable while employee contribution source of distributions are taxable. Is it correct to show as taxable and let the participant/tax preparer figure the nontaxable amount out? I noticed some providers round state tax withholdings? Does anyone else do this? Do you round federal taxes too? I noticed some states require the withholding to be a round dollar amount. Rather than try and keep track of what states require rounding and when they change it seems best to just round all state withholdings.A few providers also will not hold if the amount of state tax to withhold is less than $10. This makes sense especially if a smaller plan and the withholding is for a state that may not have any other withholding deposits that would need to be made. Does anyone else adopted this practice. Any ramification if do this?By the way, the 1099-R coding for a qualified plan distribution of before tax funds rolled over directly to a Roth IRA (code G but put taxable amount in box 2a) is a bit confusing. I would think it would be best to come up with a new code. It used to be code G meant nontaxable. It seems like TurboTax and some other software programs at one time were treating as nontaxable too.
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