IRS Withholding on min. req. distrib.

[Guest dlm]

5% owner is required to take a 70 1/2 in 1999. The owner has completed a Form W-4P showing 2 exemptions (he and spouse)of which withholding is to be calculated.

MRD = $15,000+

In order to calc w/holding, do we use payroll table for married person?

Thanks for any info.

[imchipbrown]

To my knowledge, withholding is not required, so any amount you come up with should be fine.

[Ervin Barham]

This is not an eligible rollover distribution (if you are distributing only the required minimum) so the automatic 20% withholding is not required. However, it is subject to the regular withholding rules under Section 3405(a) for periodic payments and 3405(B) for non-periodic payments.

If this qualifies as a periodic payment, then you would treat the distribution as if it were wages and use the appropriate tax table. If a participant does not complete the W-4P, then you withhold using married and 3 exemptions.

If it is not a periodic payment, then you withhold at the old 10% rate.