Guest scm Posted October 4, 1999 Posted October 4, 1999 Theresa, yes you are correct. The 20% withholding is for Fed tax purposes (for pre-tax monies). The difference would be that the 10% penalty charge would not be applicable as long as the employee's disability is a true 'disability' under the regs. I have had several employees complete a distribution form indicating that the reason for the withdrawal is a disability and it turns out that they only have minor/ short-term disability.
Guest Theresa Posted October 4, 1999 Posted October 4, 1999 Am I correct in that you still have the automatic withholding of 20% on lump sum distributions, even if the participant is totally disabled?
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now