EACA/QACA 90-day Permissible Withdrawals

[DTH]

The 414(w) regulations permit 90-day permissible withdrawals. These are not eligible for rollover,

are taxable in the year distributed and are not subject to the 72(t) additional tax on premature distributions.

I can't find anything stating whether the taxable portion of a 90-day permissible withdrawal is subject to federal income tax withholding. I assume since these are not eligible for rollover, the normal 10% withholding rules apply?

If these are not subject to federal income tax withholding, can you please provide the reference material or cite. Thanks!

[Guest nynaeve]

Just curious, does anyone have an answer to this? I am writing procedures for these withdrawals, and am not sure if the distributions are subject to any income tax withholding.

[Tom Poje]

try page 11 of the following. its from the DOL, so I'd say pretty reliable.

its their guidebook to autoenrolls (I had posted this a few days ago under the 401k board, so if some of you have already printed this it is nothing new)

The new publication is available at http://www.dol.gov/ebsa/pdf/automaticenrollment401kplans.pdf.

[Guest nynaeve]

Thanks, Tom. I will read it over, it looks very helpful.

[Guest Sieve]

IRC Section 3405 does not exempt the 90-day withdrawal payment from the withholding rules, so I would assume it therefore is subject to the rule of 3405(b).

[DTH]

Please note that in the preamble of the final regs., the IRS states that IRC 3405(a) wage withholding applies. If the participant does not elect out of federal withholding, the payor must withhold as if the participant is married with 3 allowances.