State income tax withholding on IRA distributions

Some states require state income tax withholding on taxable IRA distributions.

If the IRA custodian is physically located in just 1 state does that mean they’re not required to withhold state income tax from distributions to customers who reside in a different state that ordinarily requires withholding?



The custodian must adhere to the state withholding requirements where the beneficiary resides even if they do not do business in that state.



There is often a presence standard that would compell an IRA Custodian to offer and/or accept state withholding elections from IRA Distributions.  Although they may not be required to offer state tax withholding, they aren’t prohibited from doind so if they do not meet the presence standard.



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