Systematic payments--W-4P

[Felicia]

If an accountholder is receiving systematic payments from his IRA, does he need to receive a W-4P each year? Or, does one W-4P at the time of the first distribution cover all future payments, regardless of the year distributed?

[WDIK]

The instructions for the 2003 W4-P indicate that "Your previously filed Form W4-P will remain in effect if you do not file a form W4-P for 2003."

[Guest amfam2]

We have a lot of IRA customers who receive periodic payments. Here is what I found:

1. Customer makes tax w/h election at time of establishing periodic payments. This election remains in place until customer changes tax w/h election. They do not need to make election on IRS Form W-4P - any written notification that demonstrates their tax w/h intention is acceptable.

2. In the instructions to IRS Form W-4P, page 3, Periodic Payments - "Your payer must notify you each year of your right to choose not to have Federal Income Tax withheld or to revoke your election". The payor must inform the customer of this right at least once each calendar year. (IRC Section 3405(e)(10)(B)(i)(III); Temp Reg Section 35.3405-1 Q & A D-4.

jlg