Mandatory State Income Tax Withholding

[Guest benefitgal]

Does anyone know if PA has mandatory state income tax withholding on lump sum 401(k) distributions? I've looked and looked and can't seem to find the answer to this - Thanks!

[wmyer]

Pennsylvania does not have mandatory state withholding for 401(k) distributions.

[pmacduff]

Wow! This is eerie! I just printed a sheet off from the 2000 ASPA conference that details the State Income Tax withholding for all states! PA states that there is a mandatory State withholding of 2.8% from the gross distribution amount. I can try to e-mail you a copy of this page...it's in my Acrobat Reader software with which I'm not really proficient! Let me know if you want a copy with all States shown

[wmyer]

According to CIGNA, there is no mandatory state withholding for Pennsylvania, but of course they may be wrong.

http://www.cigna.com/professional/pdf/CPA_iidw0201.PDF

[pmacduff]

W. Myer - I have the Qualified Retirement Plan Distribution Request file if you would like me to e-mail it to you also. It is seven pages and page #7 shows a chart with the State Withholding policies. Again, it came from the 2000 ASPA conference in Washington D.C. & I think ASPA is pretty good about being sure that the info we receive is in good order and accurate (although I know everyone is human and can make mistakes!)

[wmyer]

Yes, please e-mail me a copy. (You can click on my profile.) Thanks!

[Guest benefitgal]

I would really like a copy too, please send to sglehto@yahoo.com. Thanks for your responses!

[Guest]

Pennsylvania does not ordinarily tax any "old age retirement penstion". the open question is what triggered the lump sum distribution. If it is subject to Section 72 10% penalty for early distribution, then likely subject to PA withholding. Otherwise no withholding required.