RMV 20% on pension lump sum?
client is choosing to take the lump sum on his pension of approx. $39,029. However the company is stating they are Withholding “RMV” is 20% – $618.22.
Investment amount to be rolled over directly to the new IRA company is: $38,408.59 (618.22 is no 20%)
my client is not taking the money, cashing it and then writing a check to the new ira company.
they said a check for the RMV will be mailed directly to my client and In January a 1099R will be mailed to me for tax purposes.
The company said the client had to take this money…no choice.
Have you heard of this before? what is a RMV? Why no choice in the matter?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Thu, 2015-09-10 22:12
Am not familiar with this abbreviation. However, there should not be any tax withholding on direct rollovers. The amount is too small for a full RMD, but if a prior distribution was taken this year, it could be the remainder of the current RMD amount, and that would square with the later payment of the 618.22. Client should contact the plan administrator to get a full explanation of what this is.