Withholding on payouts of terminated employees.

[Guest Dan Gould]

We annually "liquidate" accounts of former employees. We give them a choice of receiving cash (minus the 20% withholding) or a rollover to another shelter they provide us the account information about.

It is my understanding that there is a dollar amount below which it is not necessary to withhold the the 20%. What is that dollar amount?

Thanks

[david rigby]

For federal withholding, the table starts at $200.

The following link will take you to a table summarizing the state requirements. Click on State Withholding Information Sheet.

But beware, it is out of date.

http://www.cigna.com/professional/news/com...st/y2ksw_w.html