Table 1: 2013 State Withholding Requirements for Qualified Plan and IRA Plan Distributions NOTE: Use of the terms “periodical” and “non-periodical” is the same as defined for federal purposes under IRC §3405 and related federal regulations. Where there are special state applications to “eligible rollover distributions” (ERDs) as defined in IRC §3405 subject to federal withholding at 20%, they are so noted in the table. NOTE: Federal requirements are noted at the end of this table. 11102013 (replaces 10302013) DC updated to add link to FR 230.

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

Alabama (as of 03/13/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X use A-4

Agency states payers can withhold on distributions using 5% supplemental rate or may use tables if periodic but must have A-4 to use tables.

Alabama Department of Revenue Administrative Code §810-3-75-.04 at http://www.revenue.alabama.gov/incometax/1webreghold/810-03-075-MN.htm#reg81037504 Alabama Department of Revenue "Withholding Tax Tables and Instructions for Employers and Withholding Agents" at http://revenue.alabama.gov/withholding/whbooklet_0213.pdf

Alabama) (as of X Agency states can Alabama Department of

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State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

03/13/2013) IRA

use A-4 withhold on IRAs and lump sums using 5% supplemental rate on a voluntary basis.

Revenue Administrative Code §810-3-75-.04 at http://www.revenue.alabama.gov/incometax/1webreghold/810-03-075-MN.htm#reg81037504 Alabama Department of Revenue "Withholding Tax Tables and Instructions for Employers and Withholding Agents" at See Guide at http://revenue.alabama.gov/withholding/whbooklet_0213.pdf

Alaska QRP

No state income tax

Alaska IRA

No state income tax

Arizona (as of 12/11/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs

X

Withholding is voluntary if an annuity or pension payment (periodic payment). Form A-4P is required from the payee. See Tables 2 and 3.

X Withholding not supported if a non-periodic or other lump sum.

Only a pension or annuity is subject to withholding. “Annuity” means any amount paid to an individual as a pension or annuity, but only to the extent that the amount is includible in the Arizona gross income of that individual. “An amount paid as a pension or annuity” is an amount received as an annuity

A.R.S. §43-404; Arizona Withholding Tax Ruling WTR 99-2. http://www.azdor.gov/LegalResearch/Rulings.aspx See also http://www.azdor.gov/About/FAQs/Withholding.aspx And http://www.azdor.gov/LinkClick.aspx?fileticket=f69LSkeUC

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State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

under the provisions of the Internal Revenue Code. Payees may NOT elect to have Arizona income tax withheld from nonperiodic payments, lump sum distributions, or individual retirement account distributions that do not meet the federal definition of annuity.

DI%3d&tabid=241

Arizona (as of 12/11/2012) IRA

X Payee can elect withholding only to the extent that there is federal withholding and the payment meets federal annuity definition. Payees may NOT elect to have Arizona income tax withheld from individual retirement account distributions that do not meet the federal definition of annuity.

A.R.S. §43-404; Arizona Withholding Tax Ruling WTR 99-2. http://www.azdor.gov/LegalResearch/Rulings.aspx See also http://www.azdor.gov/About/FAQs/Withholding.aspx

Arkansas (as of 12/17/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance

X (ERDs require

mandatory federal and 5%

state withholding)

X (all other

distributions) Use AR 4P.

Cannot opt out of ERD 5% withholding, but can opt out of w/h on other taxable distributions through AR4P unless payments are delivered outside the United States

Arkansas Act. 1309 of 2005; A.C.A §26-51-918; The Federal code was modified by replacing the 10% withholding in § 3405 (b)(1) with a 3% Arkansas Withholding, and the 20%

http://www.azdor.gov/LegalResearch/Rulings.aspx�http://www.azdor.gov/LegalResearch/Rulings.aspx�http://www.azdor.gov/About/FAQs/Withholding.aspx�http://www.azdor.gov/About/FAQs/Withholding.aspx�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

or its possessions or paid to a non-resident alien where state withholding is also required. See instructions to AR 4P. Arkansas allows annuitants who receive benefits from an employment related annuity plan to exempt the first $6,000 per year of benefits received, but recipients must provide AR4P to claim w/h exemption.

withholding in § 3405 (c)(1)(B) with a 5% Arkansas Withholding. See instructions to AR4P at http://www.dfa.arkansas.gov/offices/incomeTax/withholding/Documents/AR4P.pdf

Arkansas (as of 12/17/2012) IRA

X Use AR 4P.

Distributions from an IRA that are payable on demand are treated as nonperiodic payments. State withholding is required on payments delivered outside the United States or its possession or to nonresident aliens. All other distributions allow payee to opt out. Payee may opt out of state withholding by completing Arkansas Form AR4P. If no AR4P opting out, then withhold at 3% of distributions.

Arkansas Act. 1309 of 2005; A.C.A.. §26-51-918; http://www.dfa.arkansas.gov/offices/incomeTax/withholding/Documents/AR4P.pdf

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State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

Additional withholding can also be requested on line 5 of AR4P. Arkansas allows distributees to exempt the first $6,000 per year of benefits received, but recipients must claim exemption on AR4P. Qualified distributions from a Roth IRA are nontaxable and, therefore, not subject to withholding.

California (as of 06/03/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X (DE 4P

Recommended)

Subject to Personal Income Tax (PIT) withholding if recipient is a California resident, unless recipient elects exemption from withholding. Payee may opt out of withholding from both periodic and non-periodic payments. Payer must notify payee annually of withholding rights.

http://www.edd.ca.gov/pdf_pub_ctr/de231p.pdf http://www.edd.ca.gov/pdf_pub_ctr/de4p.pdf

California (as of

X (DE 4P

Subject to Personal Income Tax w/h if payee

http://www.edd.ca.gov/pdf_pub_ctr/de231p.pdf

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State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

06/03/2013) IRA

recommended) is a California resident, unless recipient elects exemption from withholding. Payee may opt out of withholding from both periodic and non-periodic payments. Payer must notify payee annually of withholding rights.

http://www.edd.ca.gov/pdf_pub_ctr/de4p.pdf

Colorado (as of 02/25/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X First $20,000 of taxable pension and other retirement income is not subject to tax for individuals age 55 or older ($24,000 if age 65 or older) as long as not a premature distribution. See FYI Income 25 on the subtraction allowance at http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper For this reason, no withholding is required. If the pension organization agrees to withhold on pensions, an individual may request Colorado

Colorado Department of Revenue FAQ http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true

http://www.edd.ca.gov/pdf_pub_ctr/de4p.pdf�http://www.edd.ca.gov/pdf_pub_ctr/de4p.pdf�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

tax be withheld. Payer files same forms as for withholding on wages.

Colorado (as of 02/25/2013) IRA

X First $20,000 of taxable IRA and other pension income is not subject to tax for individuals age 55 or older ($24,000 if age 65 or older) as long as not a premature distribution. See FYI Income 25 on the subtraction allowance at http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=1193047059436&pagename=REVXWrapper For this reason no withholding is required. If the pension organization agrees to withhold on pensions, an individual may request Colorado tax be withheld. Payer files same forms as for withholding on wages.

Colorado Department of Revenue FAQ http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1191399129634&ssbinary=true

Connecticut (as of 08/14/2013) QRP NOTE: Applicable

X (Use CT W4P at http://www.ct.gov/drs/lib/drs/form

Payer must provide payee with Form CT-W4P or reasonable substitute and must notify

Connecticut Agencies Regs. §12-705(b)-3; See also IP 2013(8) at http://www.ct.gov/drs/lib/drs/p

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State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

s/2013withholding/ct-w4p.pdf )

payee of availability of state income tax withholding. Payers of pensions and annuities, both public and private, maintaining an office or transacting business in Connecticut are required to notify Connecticut residents of the availability of Connecticut income tax withholding and withhold Connecticut income tax from payments if the Connecticut resident submits a request in writing. This requirement applies to all pension and annuity payments from qualified or nonqualified plans, including lump sum distributions, whether or not payments are made from a Connecticut location.

ublications/pubsip/2013/ip2013-8.pdf And discussion at http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension

Connecticut (as of 08/14/2013) IRA

X (Use CT W4P at http://www.ct.gov/drs/lib/drs/forms/2013withholding/ct-w4p.pdf )

Payer must provide payee with Form CT-W4P or reasonable substitute and must notify payee of availability of state income tax withholding.

Connecticut Agencies Regs.. §12-705(b)-3; See also IP 2013(8) at http://www.ct.gov/drs/lib/drs/publications/pubsip/2013/ip2013-8.pdf and discussion at

http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.ct.gov/drs/lib/drs/forms/2013withholding/ct-w4p.pdf�http://www.ct.gov/drs/lib/drs/forms/2013withholding/ct-w4p.pdf�http://www.ct.gov/drs/lib/drs/forms/2013withholding/ct-w4p.pdf�http://www.ct.gov/drs/lib/drs/forms/2013withholding/ct-w4p.pdf�http://www.ct.gov/drs/lib/drs/publications/pubsip/2013/ip2013-8.pdf�http://www.ct.gov/drs/lib/drs/publications/pubsip/2013/ip2013-8.pdf�http://www.ct.gov/drs/lib/drs/publications/pubsip/2013/ip2013-8.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

Payers of pensions and annuities, both public and private, maintaining an office or transacting business in Connecticut are required to notify Connecticut residents of the availability of Connecticut income tax withholding and withhold Connecticut income tax from payments if the Connecticut resident submits a request in writing. This requirement applies to all pension and annuity payments from qualified or nonqualified plans, including lump sum distributions, whether or not payments are made from a Connecticut location

http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension

Delaware (as of 12/22/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs

Mandatory where federal withholding is mandatory (no federal election out of withholding allowed), including ERDs pursuant to IRC §3405(c), where

X all other

payments: requires payee

notice

Distributions (periodic or non-periodic) from retirement plans, annuities or employer deferred compensation plans are based upon Federal guidelines. If withholding is required for Federal purposes on these payments, then State withholding is also

State of Delaware "Employer's Guide, Section 12: Deferred Compensation" at http://www.revenue.delaware.gov/services/WITBk.shtml and http://www.revenue.delaware.gov/services/wit_folder/section12.shtml

http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.ct.gov/drs/cwp/view.asp?a=1479&q=300422&drsPNavCtr=|41594|#pension�http://www.revenue.delaware.gov/services/WITBk.shtml�http://www.revenue.delaware.gov/services/WITBk.shtml�http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

payments are made outside the U.S. pursuant to IRC §3405(e)(13), or if the payee fails to provide a TIN or the IRS later notifies the payer that the TIN provided is incorrect pursuant to IRC §3405(e)(12), then State withholding will be required.

required. Delaware withholding is mandatory on payments to which there is no federal election out of withholding, including ERDs pursuant to IRC §3405(c), where payments are made outside the U.S. pursuant to IRC §3405(e)(13), or if the payee fails to provide a TIN or the IRS later notifies the payer that the TIN provided is incorrect pursuant to IRC §3405(e)(12). Delaware recommends the use of a percentage method of withholding rather than the wage tax tables although the tax tables are allowed. If a percentage method of withholding is used, it is recommended that the percent withheld not be less than 5%.

30 Del. C.§1102 and Division of Revenue Tax Ruling 79-1 (4/18/79)

Delaware (as of 12/22/2102) IRA

Mandatory where federal withholding is mandatory (no federal election

X all other

payments, requires payee

notice

Distributions (periodic or non-periodic) from retirement plans, annuities or employer deferred compensation

State of Delaware "Employer's Guide, Section 12: Deferred Compensation" at http://www.revenue.delaware.

http://www.revenue.delaware.gov/services/WITBk.shtml�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

out of withholding allowed), including where payments are made outside the U.S. pursuant to IRC §3405(e)(13), or if the payee fails to provide a TIN or the IRS later notifies the payer that the TIN provided is incorrect pursuant to IRC §3405(e)(12).

plans are based upon Federal guidelines. Mandatory where federal withholding is mandatory (no federal election out of withholding allowed), including where payments are made outside the U.S. pursuant to IRC §3405(e)(13), or if the payee fails to provide a TIN or the IRS later notifies the payer that the TIN provided is incorrect pursuant to IRC §3405(e)(12). Delaware recommends the use of a percentage method of withholding rather than the wage tax tables although the tax tables are allowed. If a percentage method of withholding is used, it is recommended that the percent withheld not be less than 5%.

gov/services/WITBk.shtml And http://www.revenue.delaware.gov/services/wit_folder/section12.shtml 30 Del. C.§1102 and Division of Revenue Tax Ruling 79-1 (4/18/79)

District of Columbia QRP (as of 11/10/2013) NOTE: Applicable to taxable distributions from

The Fiscal Year 2013 Budget Support Act of 2012, enacted June 22, 2012, effective after a 30-day

See FR 230 at http://otr.cfo.dc.gov/node/499192 And see details at http://newsroom.dc.gov/s

There are many forms of lump sum payments that could be considered a pay out of a payee’s entire account balance if not made through a trustee-to-trustee transfer, including the cash

http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�http://www.revenue.delaware.gov/services/wit_folder/section12.shtml�http://otr.cfo.dc.gov/node/499192�http://otr.cfo.dc.gov/node/499192�http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

congressional review period, made permanent the requirement to withhold on lump-sum distributions, but not to include: - Any portion of a lump-sum payment that was previously subject to tax; - An eligible rollover distribution that is effected as a direct trustee to trustee transfer; - A rollover from an individual retirement account to a traditional or Roth individual retirement account that is effected as a direct trustee to trustee transfer. A “lump-sum distribution” is defined to mean a payment from a payor to a District resident of the resident payee’s entire account balance, exclusive

how.aspx/agency/otr/section/2/release/23108/year/2012 Cokala has received confirmation from the agency that the new withholding provisions will only attach to total account distributions. Where the resident payee still has funds in its account after a partial distribution, the partial payment is not subject to DC withholding. Only if the entire account balance is distributed will the payment be subject to DC withholding before taking any fees or other deductions. See OTR Notice 2012-02, District of Columbia Office of Tax and Revenue, February 24, 2012. See next column on matters still open. DC RESIDENT PAYEE includes individuals who are receiving periodic distributions from any form of retirement plan or account and who have a place of abode or who are residing or domiciling in the District at the time the distribution is made.

out of an IRA CD, or the reversal of a traditional IRA contribution. Cokala has developed a list of queries on these matters and is in discussion with the agency on their treatment. For the present, the only agency notice issued is at http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf Cokala obtained some additional information from the DC Office of Tax and Revenue and this is available to Cokala Table subscribers at http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf Should additional information be gathered, we plan to post it in our tables and in our news bulletins. For additional information, please contact the Office of Tax and Revenue’s Customer Service

http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

of any other tax withholding and any administrative charges and fees. A “retirement plan or retirement account” means: • A qualified employee plan • A qualified employee annuity plan • A defined contribution plan • A defined benefit plan • A tax sheltered Annuity plan • An individual retirement account • Any combination of the plans and accounts listed above; or • Any similarly situated account or plan as defined by the Internal Revenue Code Where withholding is required, it shall be at the highest District individual income tax rate

The agency has indicated that reliance may be placed on the payee's address and rebutted by a Form D-4A from the payee claiming non-resident status. See at http://otr.cfo.dc.gov/node/399402 [Subsection (f) of D.C. Official Code § 47-1812.08]

Administration at (202) 727-4TAX(4829).

http://otr.cfo.dc.gov/node/399402�http://otr.cfo.dc.gov/node/399402�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

which is in effect at the time of distribution. Currently, the highest DC income tax rate is 8.95%. See FR 230. [Subsection (f) of D.C. Official Code § 47-1812.08]

District of Columbia IRA (as of 11/10/2013)

The Fiscal Year 2013 Budget Support Act of 2012, enacted June 22, 2012, effective after a 30-day congressional review period, made permanent the requirement to withhold on lump-sum distributions, but not to include: - Any portion of a lump-sum payment that was previously subject to tax; - An eligible rollover distribution that is effected as a direct trustee to

See FR 230 at http://otr.cfo.dc.gov/node/499192 And, see details at http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012 Cokala has received confirmation from the agency that the new withholding provisions will only attach to total account distributions. Where the resident payee still has funds in its account after a partial distribution, the partial payment is not subject to DC withholding. Only if the entire account balance is distributed will

There are many forms of lump sum payments that could be considered a pay out of a payee’s entire account balance if not made through a trustee-to-trustee transfer, including the cash out of an IRA CD, or the reversal of a traditional IRA contribution. Cokala has developed a list of queries on these matters and is in discussion with the agency on their treatment. For the present, the only notice issued by the agency is at http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf

http://otr.cfo.dc.gov/node/499192�http://otr.cfo.dc.gov/node/499192�http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012�http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012�http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012�http://newsroom.dc.gov/show.aspx/agency/otr/section/2/release/23108/year/2012�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�http://newsroom.dc.gov/show.aspx?agency=otr&section=2&release=23108&year=2012&file=file.aspx%2frelease%2f23108%2fWH%2520Retirement%2520Plan%2520Distribution%2520Revision.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

trustee transfer; - A rollover from an individual retirement account to a traditional or Roth individual retirement account that is effected as a direct trustee to trustee transfer. A “lump-sum distribution” is defined to mean a payment from a payor to a District resident of the resident payee’s entire account balance, exclusive of any other tax withholding and any administrative charges and fees. A “retirement plan or retirement account” includes among others listed in QRP line above: • An individual retirement account or • Any similarly situated account or

the payment be subject to DC withholding before taking any fees or other deductions. See OTR Notice 2012-02, District of Columbia Office of Tax and Revenue, February 24, 2012. See next column on matters still open. DC RESIDENT PAYEE includes individuals who are receiving periodic distributions from any form of retirement plan or account and who have a place of abode or who are residing or domiciling in the District at the time the distribution is made. The agency has indicated that reliance may be placed on the payee's address and rebutted by a Form D-4A from the payee claiming non-resident status. See at http://otr.cfo.dc.gov/node/399402 [Subsection (f) of D.C. Official Code § 47-1812.08]

Cokala obtained some additional information from the DC Office of Tax and Revenue and this is available to Cokala Table subscribers at http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf Should additional information be gathered, we plan to post it in our tables and in our news bulletins. For additional information, please contact the Office of Tax and Revenue’s Customer Service Administration at (202) 727-4TAX(4829).

http://otr.cfo.dc.gov/node/399402�http://otr.cfo.dc.gov/node/399402�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�http://www.cokala.com/files/December_2012_examples_requesting_DC_guidance_on_lump_sum_retirement_distribution.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

plan as defined by the Internal Revenue Code Where withholding is required, it shall be at the highest District individual income tax rate which is in effect at the time of distribution. Currently, the highest DC income tax rate is 8.95%. See FR 230. [Subsection (f) of D.C. Official Code § 47-1812.08]

Florida QRP

No state income tax

Florida IRA

No state income tax

Georgia (as of 05/17/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial

X Periodic payments are subject to withholding and remitted to the DOR in the same manner as employee withholding,

X Upon the election by a payee of any non-periodic payment or distribution from a pension, annuity or

Legislation has been enacted that phases in the Georgia personal income taxation of retirement income beginning with the 2012 tax year for those 62 and older. The personal income retirement exclusion amount has

O.C.G.A. §§48-7-100(8.1); 48-7-101, 48-7-102; Reg 560-7-8-.32; and State of Georgia "Employer's Tax Guide" at https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf

https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

unless the recipient elects not to have tax withheld. Recipients should indicate their withholding preferences by submitting Form G-4P to the payer.

similar fund, the payor shall withhold from such payment the amount specified by the payee, but in no event shall the amount withheld be less than the amount which would be required to be withheld if such payment were a payment of wages by an employer to an employee for the appropriate payroll period. See https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf

been capped at $65,000 for taxpayers 65 years of age or older and $35,000 for certain taxpayers between ages 62 and 65 , or if permanently and totally disabled for tax years beginning on or after January 1, 2012 [H.B. 1055, Laws 2010, effective May 12, 2010; modified by H.B. 386, Laws 2012, effective January 1, 2013] The DOR has amended its regulation to conform to the new law governing the retirement income and has now provided examples of specific situations. [Reg. Sec. 560-7-4-.02, Georgia Department of Revenue, effective April 25, 2011] This may affect a taxpayer's choices in completion of G-4P. Withholding is required from periodic payments unless payee elects out of state withholding. Georgia defines "periodic payments" in OCGA §48-7-100 (8.1) to be designated distributions from a pension, annuity, or similar fund, which is

https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf

https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

one of a series of distributions made over the life expectancy of the participant or for a specified period of ten years or more. Recipients should indicate their withholding preferences by submitting Form G-4P to the payer. Georgia law allows payees to elect withholding on non-periodic lump sums. Once elected payers are required to withhold. If withhold on lump sums, use tax rate chart for bonuses and other compensation. OCGA §48-7-101(j).

Georgia IRA (as of 05/17/2013)

X Periodic payments are subject to withholding and remitted to the DOR in the same manner as employee withholding, unless the recipient elects not to have tax withheld. Recipients should

X Georgia law allows payees to elect withholding on non-periodic lump sums. Once elected payers are required to withhold

Legislation has been enacted that phases in the Georgia personal income taxation of retirement income beginning with the 2012 tax year for those 62 and older. See QRP terms above. [H.B. 1055, Laws 2010, effective May 12, 2010; modified by H.B. 386, Laws 2012, effective January 1, 2013] The DOR has amended its regulation governing the

O.C.G.A. §§48-7-100(8.1); 48-7-101, 48-7-102; Reg 560-7-8-.32; and State of Georgia "Employer's Tax Guide" at https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf

https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/taxguide/2013_Employers_tax_guide_02112013.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�https://etax.dor.ga.gov/inctax/withholding/TSD_Withholding_from_Pensions_and_Annuities_G4P.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

indicate their withholding preferences by submitting Form G-4P to the payer. Georgia defines periodic payments broadly and may cover periodic payments from IRAs unlike the federal rules. See comment column.

retirement income and has now provided examples of specific situations. [Reg. Sec. 560-7-4-.02, Georgia Department of Revenue, effective April 25, 2011] This may affect a taxpayer's choices in completion of G-4P. Withholding is required from periodic payments unless payee elects out of state withholding. A position exists that IRA distributions can be considered "periodic payments" under Georgia law if meeting the Georgia definition in OCGA §48-7-100 (8.1) which defines them as designated distributions from a pension, annuity, or similar fund, which is one of a series of distributions made over the life expectancy of the participant or for a specified period of ten years or more. Recipients should indicate their withholding preferences by submitting Form G-4P to the payer. Georgia law allows payees to elect

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

withholding on non-periodic lump sums. Once elected payers are required to withhold. If withhold on lump sums, use tax rate chart for bonuses and other compensation. OCGA §48-7-101(j).

Hawaii QRP (as of 12/14/2012) NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X Payments are exempt from withholding if paid: - from a trust which is exempt from tax at the time of such payment, unless such payment is made to an employee of the trust as remuneration for services rendered as an employee, or - to an employee or beneficiary under an annuity plan (i.e., one which at the time of such payment is a plan described in IRC §403(a)). Compensation received in the form of a pension for past services is also expressly excluded from withholding base. HI Form N-196 does not

http://www6.hawaii.gov/tax/2011/n196.pdf http://www.state.hi.us/tax/pubs/12bklta.pdf

http://www6.hawaii.gov/tax/2011/n196.pdf�http://www6.hawaii.gov/tax/2011/n196.pdf�http://www.state.hi.us/tax/pubs/12bklta.pdf�http://www.state.hi.us/tax/pubs/12bklta.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

identify state withholding amounts from Form 1099-R; it could be concluded that state withholding is not available in Hawaii.

Hawaii IRA (as of 02/28/2013)

X On February 28, 2013, Cokala received an email from HI DOT that the taxpayer is responsible for estimated tax payments on the IRA distributions taxable to the State of Hawaii. There is no withholding responsibility on the part of payers. HI Form N-196 does not identify state withholding amounts from Form 1099-R; it could be concluded that state withholding is not available in Hawaii.

http://www6.hawaii.gov/tax/2011/n196.pdf f http://www.state.hi.us/tax/pubs/12bklta.pdf

Idaho (as of 5/16/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products,

X If the payer of the retirement funds wants to withhold Idaho income tax from the payments as a convenience to its payees, it must apply for an Idaho withholding account and pay the

State of Idaho "A Guide to Idaho Income Tax Withholding" at http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf

http://www6.hawaii.gov/tax/2011/n196.pdf%20f�http://www6.hawaii.gov/tax/2011/n196.pdf%20f�http://www6.hawaii.gov/tax/2011/n196.pdf%20f�http://www.state.hi.us/tax/pubs/12bklta.pdf�http://www.state.hi.us/tax/pubs/12bklta.pdf�http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf�http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

amounts withheld the same way a regular employer does.

Idaho (as of 5/16/2013) IRA

X If the payer of the retirement funds wants to withhold Idaho income tax from the payments as a convenience to its payees, it must apply for an Idaho withholding account and pay the amounts withheld the same way a regular employer does.

State of Idaho "A Guide to Idaho Income Tax Withholding" at http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf

Illinois (as of 04/03/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including

X (Use IL W4)

IL generally does not consider retirement plan income taxable. No withholding on IRC §3405 covered payments. If requested by a payee, you can enter into a voluntary agreement and withhold Illinois income tax on individual retirement accounts (IRAs) or pensions. Illinois does

Illinois Department of Revenue Reg. IITA 100.7070; Illinois Department of Revenue Pub. IL-130 at http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf

http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf�http://tax.idaho.gov/pubs/EPB00006_05-14-2013.pdf�http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

'401(k), '403(a) and (b), and governmental '457 plans.

not require a separate agreement for payments covered by a federal voluntary withholding agreement. If requested by a payee, you can enter into a voluntary agreement and withhold Illinois Income Tax on individual retirement accounts (IRAs) or pensions.

Illinois (as of 04/03/2013) IRA

X (Use IL W4)

IL generally does not consider certain retirement plan income taxable. No withholding on IRC §3405 covered payments. If requested by a payee, you can enter into a voluntary agreement and withhold Illinois income tax on individual retirement accounts (IRAs) or pensions. Illinois does not require a separate agreement for payments covered by a federal voluntary withholding agreement. If requested by a payee, you can enter into a voluntary agreement and withhold Illinois Income

Illinois Department of Revenue Reg. IITA 100.7070; Illinois Department of Revenue Pub. IL-130 at http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf

http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�http://www.revenue.state.il.us/Publications/Pubs/Pub-130.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

Tax on individual retirement accounts (IRAs) or pensions.

Indiana (as of 12/20/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X (if payer business located

in Indiana.)

X (if payer business is not located in Indiana.)

Payee must request in writing for state and local withholding. If payee requests, state and local withholding is mandatory if payer business is located in Indiana. If business is not located in Indiana, payer can voluntarily withhold the state and county income taxes from pensions and annuities on request of the payee. See Table 3 for requirements.

Indiana Department of Revenue Information Bulletin #52 at http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf ; Pub. WH-13 "Withholding Instructions for Indiana State and County Income Taxes" http://www.in.gov/dor/files/ib13.pdf See also http://www.in.gov/dor/files/wh-13.pdf

Indiana (as of 12/20/2012) IRA

X (if payer business located

in Indiana.)

X (if payer business is not located in Indiana.)

Payee must request in writing for state and local withholding. If payee requests, state and local withholding is mandatory if payer business is located in Indiana. If business Is not located in Indiana, payer can voluntarily withhold the state and county income taxes from pensions and annuities

Indiana Department of Revenue Information Bulletin #52 at http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf ; Pub. WH-13 "Withholding Instructions for Indiana State and County Income Taxes" http://www.in.gov/dor/files/ib13.pdf See also

http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/files/ib13.pdf�http://www.in.gov/dor/files/ib13.pdf�http://www.in.gov/dor/files/wh-13.pdf�http://www.in.gov/dor/files/wh-13.pdf�http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/reference/bulletins/income/pdf/ib52.pdf�http://www.in.gov/dor/files/ib13.pdf�http://www.in.gov/dor/files/ib13.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

on request of the payee. See Table 3 for requirements.

http://www.in.gov/dor/files/wh-13.pdf

Iowa (as of 01/03/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X If payee is an Iowa resident and the taxable portion of annual distribution is greater than $6,000 ($12,000 married Iowa filers), Iowa tax must be withheld if federal tax is being withheld. (Use information provided on required IA W-4P to indicate withholding at 5% or wage table.)

X Use IA W-4P to elect out if annual amount $6000 or less ($12000 if married) and individual is 55 or older, disabled or a surviving spouse of an individual who would have qualified for the partial exemption. IA W-4P instructions say: "Only the pension income of the spouse who meets the eligibility requirements can be excluded. If no choice is made, [apply] … a $6,000 exemption. If … receiving retirement income from more than one source, taxpayer is still

"Nonwage income" subject to withholding includes income from pensions, annuities, self-employed retirement plans, deferred compensation, IRA distributions, and other retirement benefits payments to Iowa residents. Iowa income tax is generally required to be withheld in cases where federal income tax is withheld. If payee is an Iowa resident and the taxable portion of annual distribution is greater than $6,000 ($12,000 married Iowa filers), Iowa tax must be withheld if federal tax is being withheld. A partial exemption is provided for pensions, annuities, self-employed retirement plans, deferred compensation, IRA distributions, and other retirement benefits

I.A.C.. §§701-46.1, 46.3. http://www.state.ia.us/tax/forms/44001.pdf Note: Iowa has not updated the withholding guide since 2006. See http://www.iowa.gov/tax/educate/78552.html See form and instructions to IA W4P. at http://www.iowa.gov/tax/forms/1344020.pdf

http://www.in.gov/dor/files/wh-13.pdf�http://www.in.gov/dor/files/wh-13.pdf�http://www.state.ia.us/tax/forms/44001.pdf�http://www.state.ia.us/tax/forms/44001.pdf�http://www.iowa.gov/tax/educate/78552.html�http://www.iowa.gov/tax/educate/78552.html�http://www.iowa.gov/tax/forms/1344020.pdf�http://www.iowa.gov/tax/forms/1344020.pdf�http://www.iowa.gov/tax/forms/1344020.pdf�http://www.iowa.gov/tax/forms/1344020.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

entitled to claim only a maximum $6,000/$12,000 exemption."

to qualified individuals. Payers must provide payee with notification of withholding options. State income tax is also not required to be withheld if the amount of the distribution is $500 per month or less or if the taxable amount is $500 or less and the person receiving the distribution is eligible for the partial exemption of retirement benefits. To qualify the payee must be 55 years of age or older, disabled or a surviving spouse of an individual who would have qualified. The exemption is up to $12,000 for a joint filing status and up to $6,000 for all other filing statuses. Eligible recipients are required to complete the IA W-4P to claim exemption unless the distribution amount or the taxable amount is more than $500 per month but less than $6,000 for the year

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

where no state income tax is required to be withheld, if the person receiving the distribution is eligible for the partial exemption of retirement benefits. Reference 701 — 46.1(2) and 46.3(4) Iowa Administrative Code

Iowa (as of 01/03/2013) IRA

X If payee is an Iowa resident and the taxable portion of annual distribution is greater than $6,000 ($12,000 married Iowa filers), Iowa tax must be withheld if federal tax is being withheld. (Use information provided on required IA W-4P to indicate withholding at 5% or wage table.)

X Use IA W-4P to elect out if annual amount $6000 or less ($12000 if married) and individual is 55 or older, disabled or a surviving spouse of an individual who would have qualified for the partial exemption. IA W-4P instructions say: "Only the pension income of the spouse who meets the eligibility requirements can be excluded. If no

See above. I.A.C.. §§701-46.1, 46.3. http://www.state.ia.us/tax/forms/44001.pdf Note: Iowa has not updated the withholding guide since 2006. See http://www.iowa.gov/tax/educate/78552.html See form and instructions to IA W4P at http://www.iowa.gov/tax/forms/1344020.pdf

http://www.state.ia.us/tax/forms/44001.pdf�http://www.state.ia.us/tax/forms/44001.pdf�http://www.iowa.gov/tax/educate/78552.html�http://www.iowa.gov/tax/educate/78552.html�http://www.iowa.gov/tax/forms/1344020.pdf�http://www.iowa.gov/tax/forms/1344020.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

choice is made, [apply] … a $6,000 exemption. If … receiving retirement income from more than one source, taxpayer is still entitled to claim only a maximum $6,000/$12,000 exemption."

Kansas (as of 10/30/2013) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X (Use K 4)

To be subject to w/h, the payment must be taxable under the Kansas income tax act, and be a payment of: - Periodic payments of pensions, annuities and other deferred income. - Nonperiodic distributions of pensions, annuities and other deferred income. - Eligible rollover distributions (ERDs) of pensions, annuities and other deferred income. Kansas withholding is required only when federal withholding is required. If federal withholding is voluntary

K.S.A. §§79-32,100a, 79-3295, 79-3296; Find link to Kansas Department of Revenue Pub. KW-100 "Withholding Tax Guide" at http://www.ksrevenue.org/forms-btwh.html#pub

http://www.ksrevenue.org/forms-btwh.html#pub�http://www.ksrevenue.org/forms-btwh.html#pub�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

on these payments, Kansas withholding is also voluntary. If you are a payer of a taxable pension on which federal withholding is not required, but the Kansas resident payee elects to have federal withholding deducted from that pension, since the federal withholding is voluntary, Kansas withholding is also voluntary on the payment. Payees may chose or not chose to have Kansas withholding.

Kansas (as of 10/30/2013) IRA

X (Use K 4)

To be subject to w/h, the payment must be taxable under the Kansas income tax act, and be a payment of: - Periodic payments of pensions, annuities and other deferred income. - Nonperiodic distributions of pensions, annuities and other deferred income. - Eligible rollover distributions (ERDs) of pensions, annuities and other deferred income.

K.S.A. §§79-32,100a, 79-3295, 79-3296 Find link to Kansas Department of Revenue Pub. KW-100 "Withholding Tax Guide" at http://www.ksrevenue.org/forms-btwh.html#pub

http://www.ksrevenue.org/forms-btwh.html#pub�http://www.ksrevenue.org/forms-btwh.html#pub�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

IRA distributions are included in this definition. Kansas withholding is required only when federal withholding is required. If federal withholding is voluntary on these payments, Kansas withholding is also voluntary. If you are a payer of distribution on which federal withholding is not required, but the Kansas resident payee elects to have federal withholding deducted, since the federal withholding is voluntary, Kansas withholding is also voluntary on the payment. Payees may chose or not chose to have Kansas withholding.

Kentucky (as of 12/23/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment

X IRAs and QRP distributions are exempt from Kentucky withholding and are subject only on a mutually agreeable voluntary basis.

Kentucky Department of Revenue "Withholding Kentucky Income Tax" http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf

http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

Kentucky (as of 12/23/2012) IRA

X IRAs and QRP distributions are exempt from Kentucky withholding and are subject only on a mutually agreeable voluntary basis.

Kentucky Department of Revenue "Withholding Kentucky Income Tax" http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf

Louisiana (as of 12/23/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X (L-4

recommended)

Withholding income tax on pensions, retirement income, and annuities is not required as provided under R.S 47:111(A)(9) . However, a recipient may request that withholding tax be deducted from those sources of income. LDOR recommends that payer notify payee of state withholding option.

Louisiana Department of Revenue FAQ http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH See law at http://www.legis.state.la.us/lss/lss.asp?doc=101090

Louisiana (as of X Withholding income tax Louisiana Department of

http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://www.revenue.ky.gov/NR/rdonlyres/07644FF8-0204-48F2-B781-4720C38006C4/0/42A003811.pdf�http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH �http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH �http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH �http://www.legis.state.la.us/lss/lss.asp?doc=101090�http://www.legis.state.la.us/lss/lss.asp?doc=101090�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

12/23/2012) IRA

(L-4 recommended)

on pensions, retirement income, and annuities is not required as provided under R.S 47:111(A)(9) . However, a recipient may request that withholding tax be deducted from those sources of income. LDOR recommends that payer notify payee of state withholding option.

Revenue FAQ http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH See law at http://www.legis.state.la.us/lss/lss.asp?doc=101090

Maine (as of 12/24/2012) QRP NOTE: Applicable to taxable distributions from QRPs, life insurance products, commercial annuities, and endowment contracts. QRPs include IRC '401(a), including '401(k), '403(a) and (b), and governmental '457 plans.

X for lump sums and eligible rollover distributions (ERDs) under §3405.

X for periodical

payments under §3405(e)(2)

(Use W4 ME at http://www.maine.gov/revenue/forms/with/2013/13_w

4me.pdf )

Periodical payments: Maine income tax withholding from periodic payments under IRC §3405(e)(2) is calculated in the same way as Maine income tax withholding from wages using allowances on Form W-4ME. Where no federal withholding because of W-4P election, there is no Maine withholding. If no W-4P and no W-4ME, withhold based on single status and no allowances. Even if the periodic payments are subject to federal income tax withholding, recipients may elect to be exempt from Maine

See 36 MRSA Chapter 827 (sections 5250 through 5255-B). See Maine Department of Revenue Withholding Tables at http://www.maine.gov/revenue/forms/with/2013/13_whtables.pdf For further specifics see Rule 803: http://www.maine.gov/revenue/rules/html/rule803.htm

http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH�http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH�http://revenue.louisiana.gov/sections/FAQ/default.aspx?type=GEN&view=all#WTH�http://www.legis.state.la.us/lss/lss.asp?doc=101090�http://www.legis.state.la.us/lss/lss.asp?doc=101090�http://www.maine.gov/revenue/forms/with/2013/13_w4me.pdf�http://www.maine.gov/revenue/forms/with/2013/13_w4me.pdf�http://www.maine.gov/revenue/forms/with/2013/13_w4me.pdf�http://www.maine.gov/revenue/forms/with/2013/13_w4me.pdf�http://www.maine.gov/revenue/forms/with/2013/13_whtables.pdf�http://www.maine.gov/revenue/forms/with/2013/13_whtables.pdf�http://www.maine.gov/revenue/forms/with/2013/13_whtables.pdf�http://www.maine.gov/revenue/rules/html/rule803.htm�http://www.maine.gov/revenue/rules/html/rule803.htm�

State Mandatory State Withholding

Voluntary Withholding Withholding Not Allowed

Comments Authority

Follows federal withholding. Payee who opts out of federal withholding is automatically opted out of state withholding. Payee who is required to have federal withholding is required to have state withholding.

State requirements triggered by federal treatment, but can vary once federal treatment determined.

State operates independently of federal withholding, usually requires state withholding unless expressly opt out.

Withholding is voluntary at the request of the payee; once requested withholding is mandatory on the part of the payer.

Withholding is voluntary upon agreement between the payee and the payer.

income tax withholding, provided the recipient certifies that the recipient had no Maine income tax liability for the prior calendar year and expects to have no Maine income tax liability for the current calendar year. The election must be made on Form W-4ME and remains in effect until the recipient generates a Maine income tax liability. Lump sums: Where there is 10% or 20% flat federal withholding on other §3405 payments, Maine withholding of 5% is required. Recipients electing to be exempt from federal income tax withholding are automatically exempt from Maine income tax withholding unless voluntary Maine withholding is requested using W-4ME . For personal income tax purposes: For tax years beginning after 201