Pension distributions

[Gary]

A plan sponsor partiicpant is taking an in service distribution on a quarterly basis.

He asked how the withholding should be handled.

As far as I see it, the income of course is taxed as ordinary income and with regard to withholding it should be handled just like any W-2 income (except no FICA taxes). I think this is something that is in the domain of their CPA (or payroll provider for that matter) not their pension professional.

Does my opinion seem reasonable? Better ideas?

Thanks.

[masteff]

the income of course is taxed as ordinary income and with regard to withholding it should be handled just like any W-2 income (except no FICA taxes).

I concur. It's an installment payment regardless of whether monthly or quarterly. And in-service vs post-service doesn't alter that. I'm assuming it's an age 59 1/2 or older participant (ie no early withdrawl penalty nor restriction on distribution of deferrals)?