Form Ar4p - Employee'S Withholding Certificate For Pensions And Annuity Payments Page 2
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1
2Additional Instructions
Section references are to the Internal Revenue Code.
Withholding From Pensions and Annuities
Eligible Rollover Distribution - 5% Withholding
State income tax withholding applies to the taxable part of payments made
Distributions you receive from qualified pension or annuity plans (for example,
from pension, profit-sharing, stock bonus, annuity, and certain deferred
401(k) pension plans, IRAs, and section 457(b) plans maintained by a govern-
compensation plans; from individual retirement arrangements (IRAs); and
mental employer) or tax-sheltered annuities that are eligible to be rolled over
from commercial annuities. The method and rate of withholding depends on
tax free to an IRA or qualified plan are subject to a flat 5% state withholding
(a) the kind of payment you receive, (b) whether the payments are delivered
rate. The 5% withholding rate is required, and you cannot choose not to
outside the United States or its possessions, and (c) whether the recipient
have income tax withheld from eligible rollover distributions. Do not give Form
is a nonresident alien individual, a nonresident alien beneficiary, or a foreign
AR4P to your payer unless you want an additional amount withheld. Then,
estate. Qualified distributions from a Roth IRA are nontaxable and, therefore,
complete line 5 of Form AR4P and submit the form to your payer.
not subject to withholding. Because your tax situation may change from year
to year, you may want to refigure your withholding each year. You can change
The payer will not withhold state income tax if the entire distribution is trans-
the amount to be withheld by using lines 2 and 3 of Form AR4P.
ferred by the plan administrator in a direct rollover to a traditional IRA, qualified
pension plan, governmental section 457(b) plan (if allowed by the plan), or
Choosing Not To Have Income Tax Withheld
tax-sheltered annuity.
You (or in the event of death, your beneficiary or estate) can choose not to
Distributions that are (a) required by law, (b) one of a specified series of
have state income tax withheld from your payments by using line 1 of Form
equal payments, or (c) qualifying “hardship” distributions are not “eligible
AR4P. For an estate, the election to have no income tax withheld may be made
rollover distributions” and are not subject to the mandatory 5% state income
by the executor or personal representative of the decedent. Enter the estate’s
tax withholding.
EIN in the area reserved for “Your social security number” on Form AR4P. You
may not make this choice for eligible rollover distributions.
Changing Your “No Withholding” Choice
Periodic Payments
Periodic Payments
Withholding from periodic payments of a pension or annuity is figured in the
If you previously chose not to have state income tax withheld and you now
same manner as withholding from wages. Periodic payments are made in
want withholding, complete another Form AR4P and submit it to your payer. If
installments at regular intervals over a period of more than 1 year. They may
you want state income tax withheld at the rate set by law (married with three
be paid annually, quarterly, monthly, etc. If you submit an AR4P that does
allowances), write “Revoked” next to the checkbox on line 1 of the form.
not contain your correct taxpayer identification number (TIN), the payer must
Nonperiodic Payments
withhold as if you are single claiming zero withholding allowances even if you
choose not to have state income tax withheld. If you want state income tax to
be withheld, you must designate the number of withholding allowances on line
If you previously chose not to have state income tax withheld and you now
3 of Form AR4P and indicate your marital status by checking the appropriate
want withholding, write “Revoked” next to the checkbox on line 1 and submit
box. Under current law, you cannot designate a specific dollar amount to be
Form AR4P to your payer.
withheld. However, you can designate an additional amount to be withheld on
Statement of Income Tax Withheld From Your Pension or An-
line 5. For periodic payments, your Form AR4P stays in effect until you change
nuity
or revoke it. Your payer must notify you each year of your right to choose not to
have state income tax withheld (if permitted) or to change your choice. There
are some kinds of periodic payments for which you cannot use Form AR4P
By January 31 of next year, your payer will furnish a statement to you on
because they are already defined as wages subject to state income tax with-
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-
holding. These payments include retirement pay for service in the U.S. Armed
Sharing Plans, IRAs, Insurance Contracts, etc., showing the total amount of
Forces and payments from certain nonqualified deferred compensation plans
your pension or annuity payments and the total federal income tax withheld
and deferred compensation plans of exempt organizations described in Section
during the year.
457. Your payer should be able to tell you whether Form AR4P applies. If you
do not submit Form AR4P to your payer, the payer must withhold on periodic
payments as if you are married claiming three withholding allowances.
Nonperiodic Payments - 3% Withholding
Your payer must withhold at a flat 3% rate from nonperiodic payments (but
see Eligible rollover distribution - 5% withholding) unless you choose not to
have state income tax withheld. Distributions from an IRA that are payable on
demand are treated as nonperiodic payments. You can choose not to have
state income tax withheld from a nonperiodic payment (if permitted) by submit-
ting Form AR4P (containing your correct TIN) to your payer and checking the
box on line 1. Generally, your choice not to have state income tax withheld
will apply to any later payment from the same plan. You cannot use line 2 for
nonperiodic payments. But you may use line 5 to specify an additional amount
that you want withheld.
AR4P Instr. (R 1/03/13)
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