Form W-4p - Withholding Certificate For Pension Or Annuity Payments - 2017 Page 3
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Form W-4P (2017)
Page
Additional Instructions
Caution: There are penalties for not paying enough federal
income tax during the year, either through withholding or
Section references are to the Internal Revenue Code.
estimated tax payments. New retirees, especially, should see
When should I complete the form? Complete Form W-4P and
Pub. 505. It explains your estimated tax requirements and
give it to the payer as soon as possible. Get Pub. 505, Tax
describes penalties in detail. You may be able to avoid quarterly
Withholding and Estimated Tax, to see how the dollar amount
estimated tax payments by having enough tax withheld from
you’re having withheld compares to your projected total federal
your pension or annuity using Form W-4P.
income tax for 2017. You also may use the IRS Withholding
Periodic payments. Withholding from periodic payments of a
Calculator at for help in determining
pension or annuity is figured in the same manner as withholding
how many withholding allowances to claim on your Form W-4P.
from wages. Periodic payments are made in installments at
Multiple pensions/more-than-one-income. To figure the
regular intervals over a period of more than 1 year. They may be
number of allowances that you may claim, combine allowances
paid annually, quarterly, monthly, etc.
and income subject to withholding from all sources on one
If you want federal income tax to be withheld, you must
worksheet. You may file a Form W-4P with each pension payer,
designate the number of withholding allowances on line 2 of
but don’t claim the same allowances more than once. Your
Form W-4P and indicate your marital status by checking the
withholding usually will be most accurate when all allowances
appropriate box. Under current law, you can’t designate a
are claimed on the Form W-4P for the highest source of income
specific dollar amount to be withheld. However, you can
subject to withholding and zero allowances are claimed on the
designate an additional amount to be withheld on line 3.
others.
If you don’t want any federal income tax withheld from your
Other income. If you have a large amount of income from other
periodic payments, check the box on line 1 of Form W-4P and
sources not subject to withholding (such as interest, dividends,
submit the form to your payer. However, see Payments to
or capital gains), consider making estimated tax payments using
Foreign Persons and Payments To Be Delivered Outside the
Form 1040-ES, Estimated Tax for Individuals. Get Form
United States on page 4.
1040-ES and Pub. 505 at
Caution: If you don’t submit Form W-4P to your payer, the
If you have income from wages, see Pub. 505 to find out if
payer must withhold on periodic payments as if you’re married
you should adjust your withholding on Form W-4 or Form W-4P.
claiming three withholding allowances. Generally, this means
Note: Social security and railroad retirement payments may be
that tax will be withheld if your pension or annuity is at least
includible in income. See Form W-4V, Voluntary Withholding
$1,720 a month.
Request, for information on voluntary withholding from these
If you submit a Form W-4P that doesn’t contain your correct
payments.
social security number (SSN), the payer must withhold as if
Withholding From Pensions and Annuities
you’re single claiming zero withholding allowances even if you
checked the box on line 1 to have no federal income tax
Generally, federal income tax withholding applies to the taxable
withheld.
part of payments made from pension, profit-sharing, stock
There are some kinds of periodic payments for which you
bonus, annuity, and certain deferred compensation plans; from
can’t use Form W-4P because they’re already defined as wages
individual retirement arrangements (IRAs); and from commercial
subject to federal income tax withholding. These payments
annuities. The method and rate of withholding depend on (a) the
include retirement pay for service in the U.S. Armed Forces and
kind of payment you receive; (b) whether the payments are to be
payments from certain nonqualified deferred compensation
delivered outside the United States or its possessions; and (c)
plans and deferred compensation plans described in section
whether the recipient is a nonresident alien individual, a
457 of tax-exempt organizations. Your payer should be able to
nonresident alien beneficiary, or a foreign estate. Qualified
tell you whether Form W-4P applies.
distributions from a Roth IRA are nontaxable and, therefore, not
subject to withholding. See page 4 for special withholding rules
For periodic payments, your Form W-4P stays in effect until
that apply to payments to be delivered outside the United
you change or revoke it. Your payer must notify you each year
States and payments to foreign persons.
of your right to choose not to have federal income tax withheld
(if permitted) or to change your choice.
Because your tax situation may change from year to year, you
may want to refigure your withholding each year. You can
Nonperiodic payments—10% withholding. Your payer must
change the amount to be withheld by using lines 2 and 3 of
withhold at a flat 10% rate from nonperiodic payments (but see
Form W-4P.
Eligible rollover distribution—20% withholding on page 4)
unless you choose not to have federal income tax withheld.
Choosing not to have income tax withheld. You (or in the
Distributions from an IRA that are payable on demand are
event of death, your beneficiary or estate) can choose not to
treated as nonperiodic payments. You can choose not to have
have federal income tax withheld from your payments by using
federal income tax withheld from a nonperiodic payment (if
line 1 of Form W-4P. For an estate, the election to have no
permitted) by submitting Form W-4P (containing your correct
income tax withheld may be made by the executor or personal
SSN) to your payer and checking the box on line 1. However,
representative of the decedent. Enter the estate’s employer
see Payments to Foreign Persons and Payments To Be
identification number (EIN) in the area reserved for “Your social
Delivered Outside the United States on page 4. Generally, your
security number” on Form W-4P.
choice not to have federal income tax withheld will apply to any
You may not make this choice for eligible rollover
later payment from the same plan. You can’t use line 2 for
distributions. See Eligible rollover distribution—20% withholding
nonperiodic payments. But you may use line 3 to specify an
on page 4.
additional amount that you want withheld.
Caution: If you submit a Form W-4P that doesn’t contain your
correct SSN, the payer can’t honor your request not to have
income tax withheld and must withhold 10% of the payment for
federal income tax.
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