tax withholding when create a new NUA brokerage account
Hi, I am retired and moving my company stocks from 401k saving to outside brokerage account without any cash pay off. The administrator told me it’s mandatory withholding IRS 20% tax from my new NUA account and based on the total cost base “X”.
my question; (1) what is total distribution income will show up on my 1099R on line 1 & 2a? Is X+0.2X?
(2) Can I request non withholding and pay tax through my own baking account? Thanks
Permalink Submitted by Jimbon on Tue, 2024-04-16 19:56
typo: banking account
Permalink Submitted by Alan - IRA critic on Tue, 2024-04-16 20:24
There is no mandatory withholding for the distribution of employer shares for NUA purposes per Sec 3405(e)(8) of the tax code. Taxes on the cost basis in Box 2a of the 1099R will have to be paid from other income sources or quarterly estimates.
Permalink Submitted by Jimbon on Tue, 2024-04-16 21:23
Very appreciated your response. I will mention this code with my administrator.