Nevada Resident 401k moved to GA
My brother was a Nevada resident where he worked & retired at age 64. He was in the process of moving to Atlanta, GA. He was driving from Nevada to Georgia by car when he passed away in Texas. He did not have a beneficiary on his 401K but his sisters are the only living members of his family. We got a EIN and set up a Estate Bank account per the 401k requirements for his estate in Georgia. The 401k paid out his monies to the Estate account minus 20% Federal taxes but did not take any state tax. Since he lived and worked in Nevada at time of his death do we owe state taxes for Georgia. He had not fully moved to Ga. at the time of his death. His drivers license and voters registration was still listed as Nevada although he did put in a change of address for Ga.
Permalink Submitted by Alan - IRA critic on Mon, 2019-05-20 17:34
Since the lump sum distribution will be passed through his estate under his will or under the intestate provisions of NV to his sisters, the state income taxes will be due depending on the state of residency of the sisters. In other words, the estate will not owe income taxes. However, the plan should not have taken out federal WH unless the executor requested it because this distribution was not eligible for rollover. The withholding will now have to be recovered by the estate on Form 1041 and passed through to the beneficiaries. It cannot be directly assigned to the beneficiaries.
Permalink Submitted by Bruce Steiner on Tue, 2019-05-21 16:44