New Withholding Rules Requiring W4R?

Changes to IRS forms and income-tax withholding

Effective January 1, 2023, the IRS is mandating changes to the way John Hancock (payer) collects federal tax withholding information from plan participants (payees). The changes vary based on your plan type and the distribution type requested by the plan participant.

Defined contribution plans
For nonperiodic payments that aren’t eligible for rollover (e.g., hardship distributions and required minimum distributions), participants may elect a federal tax withholding other than the default 10% (which remains the default if the form isn’t returned), including 0% withholding, by completing Form W-4R.

For eligible rollover distributions, participants may elect a federal tax withholding greater than the default 20% (which remains the default if the form isn’t returned) by completing Form W-4R.

Defined contribution form availability
Our automated forms will be updated and available for use on January 3, 2023, the first business day in the new year. Visit the plan sponsor website to download the forms as needed. The prior versions of the forms will be accepted through March 31, 2023. Starting April 1, 2023, the old forms will no longer be valid and accepted.

Defined benefit plans
Starting January 1, 2023, all tax withholding information for defined benefit plans will be collected using IRS Form W-4P and Form W-4R.

The new Form W-4P is completely revised and requires participants to input specific information to determine their federal tax withholding for periodic pension and annuity payments. Participants can still elect to have no federal tax withheld from these payments.

Form W-4R will be used for nonperiodic payments and eligible rollover distributions in the same way as defined contribution plans (outlined above).

Defined benefit form availability
Our automated forms will be updated and available for use on January 3, 2023, the first business day in the new year. Visit the plan sponsor website to download the forms as needed. For periodic pension and annuity payments for participants whose paperwork was generated prior to January 3, 2023, John Hancock will accept the prior version of the form until January 31, 2023.

If you have any questions or want additional information, please contact your John Hancock representative.