distribution to individual with no social security number

[Santo Gold]

We have a small 403(b) plan that covers non-resident aliens. An individual worked for the business, entered the plan, has an account balance in the plan, and has now left. The individual is resident of the Israel but not the USA and the owner does not believe she has a SS number. How can we pay this individual out if they have no SS#?

Any comments are appreciated.

[ETA Consulting LLC]

Have them obtain a tax ID number.

Good Luck!

[Peter Gulia]

Require the participant to furnish her individual taxpayer identification number.

If the payee is a non-resident alien and the distribution is not paid as a direct rollover to a (U.S.) eligible retirement plan, the Federal income tax withholding ordinarily is 30% unless the distributee submits to the plan's administrator a properly completed Form W-8BEN (or other form of the W-8 series) to claim reduced withholding under an income tax treaty, or Form 8233 to claim an exemption from withholding. 26 C.F.R. 1.1441-1 to -9.

Report a distribution paid to a foreign person on Form 1042-S.