Tax Reporting: Federal income tax withholding on IRA conversions

In certain circumstances Federal income tax is required to be withheld on an IRA distribution at a rate of 10% if an election is not made at the time of your IRA distribution. You may elect to have no tax or a different amount withheld. If you roll over your employer-sponsored 401(k) retirement plan assets to an IRA account with us, the distribution may be subject to a mandatory withholding rate of 20%. Any amount not rolled over is subject to tax, and if you are under 59½, an additional 10% early withdrawal penalty may apply. You must roll the entire distribution over, including the amount withheld, within 60 days for the rollover to be tax-free. Income tax is not withheld on a direct rollover…

In certain circumstances Federal income tax is required to be withheld on an IRA distribution at a rate of 10% if an election is not made at the time of your IRA distribution. You may elect to have no tax or a different amount withheld. If you roll over your employer-sponsored 401(k) retirement plan assets to an IRA account with us, the distribution may be subject to a mandatory withholding rate of 20%. Any amount not rolled over is subject to tax, and if you are under 59½, an additional 10% early withdrawal penalty may apply. You must roll the entire distribution over, including the amount withheld, within 60 days for the rollover to be tax-free. Income tax is not withheld on a direct rollover…

If federal income tax withholding is applied to your conversion, state income tax may also apply. If a minimum percentage amount applies, withholding will be set at the greater of the minimum state tax or the amount you specify. Depending upon the state you live in, state income tax withholding may be required. You may also elect not to have state tax withholding apply or you may elect to increase the rate of state withholding above your state’s minimum percentage amount. Consult your tax advisor…

You can withdraw any amount above the minimum at any time from your RRIF.

Important considerations:…