Can a distribution withhold 30%?

[Lori H]

a participant (under age 59.5) wants to have 30% withheld from their distribution. Do they just elect this on the Benefit Payment Election Form and/or does a Form W-9P need to be completed?

[QDROphile]

I don't think it can be done for an eligible rollover distribution.

[K2retire]

It's my understanding that the required 20% is the minimum and you can always request more. Given that most participants (particularly those under age 59 1/2) will owe more than 20%, it seems perfectly reasonable.

[ETA Consulting LLC]

I'm with K2retire on this one. The 20% is a minimum.

Good Luck!

[ESOP Guy]

We do it all the time. If the person puts on their form they want extra we do it.

[BG5150]

I've seen 100% withholding at the participant's request.

[joel]

OF COURSE!!!

[Lori H]

They don't need to fill out a special form outside the standard Benefit Payment Election Form such as a W-9P do they?

[ESOP Guy]

They don't need to fill out a special form outside the standard Benefit Payment Election Form such as a W-9P do they?

Not that I know of. We have added a line for requesting extra Federal and a line for extra state taxes to our standard distribution form. For one thing I just can't ever imagine the government ever getting bent out of shape becasue someone wants to gvie them more money.

As an aside I have seen 100% withholding request once also.

[david rigby]

Probably just a typo above, the correct form is W-4P.

http://www.irs.gov/pub/irs-pdf/fw4p.pdf

Extracted from page 4 of the instructions:
"The 20% withholding rate is required, and you cannot choose not to have income tax withheld from eligible rollover distributions. Do not give Form W-4P to your payer unless you want an additional amount withheld."

[Lori H]

Probably just a typo above, the correct form is W-4P.

http://www.irs.gov/pub/irs-pdf/fw4p.pdf

Extracted from page 4 of the instructions:

"The 20% withholding rate is required, and you cannot choose not to have income tax withheld from eligible rollover distributions. Do not give Form W-4P to your payer unless you want an additional amount withheld."

so it IS required.

[david rigby]

20% is required for rollable distributions, but, as stated in the quote, the EE may submit a W-4P to elect "additional amount withheld".

[BG5150]

Though, if the assets are with a big carrier, there usually is a place on the distribution form to elect more withholding, and we generally accept that as a W-4P Equivalent.

We also added a similar line to our distribution forms (for participants in pooled accounts).

I rarely give out any W-4Ps.