Non-Governmental 457(b) - Taxation on Distribution

A distribution will be paid 10/1/2023 from a non-governmental 457(b) Plan.  The total amount of distribution will need to be reported as taxable wages on the W-2.  The distribution will be paid directly from 457(b) account to participant.

1) If this is eligible compensation under the document, how can an employee defer from this as it is not actual compensation being paid via a paycheck?  

2) Is there any ability to have taxes withheld from the payout or not?  I expect not, since no 1099-R, unless I am completely confused.

3) Do I understand the process correctly, which I believe is to pay from the account, but report on a W-2?  Or should the distribution not be paid from the account and instead paid in ta paycheck with tax withholding (aside from previously withheld FICA)?  If the latter is the case, does the amount in the 457b account get paid directly to the employer?

Thanks!

Check whether the plan sponsor's agreement with its investment or service provider includes a service for not only paying a plan distribution but also tax-reporting it and withholding taxes from it.

The deferred wages paid under a 457(b) plan can be sufficiently unhooked from regular wages that a service provider could do the tasks separately from the payer of regular wages.

Yes W2 and I think tax withholding is required based on the rules for withholding from compensation paid in whatever frequency the distributions are paid. This is something that should have been arranged from the get go - would you set up a 401(k) plan w/o the mechanism for distributions?

If the custodian is not able to handle, then transferring funds to the employer to pay and record through its payroll function might be a viable option.

If the document uses W2 compensation but does not exclude NQDC distributions then it should be included in the person's plan compensation UNLESS it is paid on account of termination from employment, which should never be included.