0 DC WITHHOLDING REQUIREMENTS ON RETIREMENT DISTRIBUTIONS REVISEDBondBeebe
Brian Wynne, CPA
DC passed emergency legislation last Friday, February 24, 2012, mostly repealing the new-for-2011 withholding requirements on retirement distributions to DC residents. Previously, DC required top-rate (8.95%) withholding on all retirement distributions to DC residents. Effective immediately, the withholidng requirement is repealedfor periodic and non-lump-sum retirement plan distributions. The withholding requirement now only applies to lump-sum distributions, but excludes:
(1) any portion of a lump-sum payment that was previously subject to tax;
(2) an eligible rollover distribution that is done as a trustee-to-trustee transfer; and
(3) a rollover from an IRA to a traditional or Roth IRA that is done as a trustee-to-trustee transfer.