MS 100DR Ret Taxheld Retplans
User Manual: MS 100DR
Open the PDF directly: View PDF 
.
Page Count: 4
CLIENT
ACCOUNTS
QUICK
REFERENCE
State Income Tax Withholding
For DLJSC Retirement Plans
The following procedures address state income tax withholding for your clients with retirement accounts in which Donaldson, Lufkin
& Jenrette Securities Corporation (DLJSC) serves as the Custodian or servicing agent.
Effective immediately, your clients need to use the following new forms, which include state income tax withholding information,
for the accounts that DLJSC serves as the Custodian:
Name of Form Code
IRA Distribution Request Form IRA-100DR (Rev. 2/01)
QRP Distribution Request Form QRP-102 (Rev. 2/01)
Roth Conversion/Recharacterization Request Form ROTH-RECH (Rev. 2/01)
Since every state does not require state income tax withholding, and the process of withholding varies among those states that
do, clients should review the Federal and State Income Tax Withholding Instructions (see Exhibit 1). Your clients will find these
instructions within the IRA Distribution Request Form. Request forms that are not properly completed will result in delayed processing.
NOTE: The Roth Conversion/Recharacterization Request Form and the QRP Distribution Request Form, which are available from
Pershing, include similar federal and state tax withholding instructions.
TAX WITHHOLDING CALCULATIONS ON DISTRIBUTIONS
The following formula can be used to calculate the net or gross amount of a distribution. Refer to Exhibit 1, Federal and State
Income Tax Withholding Instructions, when making these calculations.
NOTE: The following are examples only. Actual calculations will vary depending upon the client’s state of residence and
withholding elections.
Use this formula to calculate the net amount:
Net Distribution = Gross Distribution - Tax
EXAMPLE 1 – A resident of Massachusetts requests a distribution of $20,000.00. With 10% federal tax withholding and 5.85%
state tax withholding, the account would receive a net payment of $16,830.00. The following calculation illustrates this example:
Gross Distribution $20,000.00
Less: Federal Tax at 10% -$2,000.00
Less: State Tax at 5.85% -$1,170.00
Net Distribution $16,830.00
Use this formula to calculate the gross amount:
Gross Distribution = Net Amount
1 – Total Tax Rate
EXAMPLE 2 – A resident of North Carolina wishes to receive a net distribution of $20,000.00. After 10% federal tax withholding
and the requested 4% state tax withholding, the account would request a distribution of $23,255.81. The following calculation illustrates
this example:
Federal Tax Rate = 10%; State Tax Rate = 4%; and Total Tax Rate = 14%
Gross Distribution = $20,000.00
1 – .14
Gross Distribution = $20,000.00
0.86
Gross Distribution = $23,255.81
(continued)
TRADITIONAL IRA, SEP, SIMPLE, AND ROTH IRA
FEDERAL AND STATE INCOME TAX WITHHOLDING INSTRUCTIONS
In most cases, federal and state income tax law requires that we withhold tax from your distribution. By completing Section
3.D of your Distribution Request and following the chart below, you may elect in some cases not to have tax withheld, or
you can tell us how much to withhold. However, if you do not make an election, we will automatically withhold as follows:
FEDERAL:
10 percent of your gross distribution.
STATE: Based on your residency as outlined below.
IF YOUR STATE OF RESIDENCE IS:
AK, AR, AZ, FL, HI, IL, MD, MI, NH,
NV, NY, SD, TN, TX, WA, WY
STATE INCOME TAX WITHHOLDING REQUIREMENTS AND ELECTIONS
STATE INCOME TAX WITHHOLDING IS NOT REQUIRED
State income tax withholding is not required for residents of these states. We will not withhold
state income tax from your distribution if you reside in these states.
Rates are subject to change without notice. Keep this page for your records.
AL, CO, CT, DC, GA, ID, IN, KS, KY,
MN, MO, MS, MT, NE, NJ, ND, NM,
OH, PA, RI, SC, UT, VA, WV, WI
DE, IA, MA, ME, OK
CA, LA, NC, OR, VT
VOLUNTARY STATE INCOME TAX WITHHOLDING
We will withhold state income tax only if you instruct us to do so. If you want state income taxes
to be withheld, you must indicate the amount or percentage.
NOTE:
We require tax withholding amounts to be requested in whole dollars for the following
states: Colorado, Connecticut, Missouri, and New Jersey. Amounts must be stated in whole dollars.
MANDATORY STATE INCOME TAX WITHHOLDING WHEN FEDERAL INCOME
TAX IS WITHHELD
We will withhold state income tax according to the rates below when federal income tax
is withheld from your distribution:
DELAWARE, IOWA, MAINE, AND OKLAHOMA ................................................................................................5.00% OF GROSS DISTRIBUTION
MASSACHUSETTS ......................................................................................................................................5.85% OF GROSS DISTRIBUTION
If you have elected out of federal income tax withholding, but request state
income tax withholding, the following rules apply:
DELAWARE, MAINE, AND MASSACHUSETTS ..............................................................................SPECIFY A DOLLAR AMOUNT OR A PERCENTAGE
IOWA AND OKLAHOMA................................................................................................................5.00% OR MORE OF GROSS DISTRIBUTION
MANDATORY STATE INCOME TAX WITHHOLDING WHEN FEDERAL INCOME
TAX IS WITHHELD
We will withhold state income tax according to the rates below whenever federal income
tax is withheld from your distribution, unless you indicate otherwise:
CALIFORNIA ..........................................................................................................................10.00% OF FEDERAL INCOME TAX WITHHELD
LOUISIANA..............................................................................................................................................3.00% OF GROSS DISTRIBUTION
NORTH CAROLINA ....................................................................................................................................4.00% OF GROSS DISTRIBUTION
OREGON ................................................................................................................................................8.00% OF GROSS DISTRIBUTION
VERMONT ..............................................................................................................................24.00% OF FEDERAL INCOME TAX WITHHELD
If you want state income tax withholding at a different rate (or no state income tax
withholding), these are your choices:
To indicate that you do not want state income tax withheld: check the box Do not withhold state income tax in section
3.D.2 of this form; or specify a dollar amount or a percentage to indicate your state income tax withholding election.
IRA-100 2/01
Exhibit 1
STATE ABBREVIATION STATE ABBREVIATION
ALABAMA AL MONTANA MT
ALASKA AK NEBRASKA NE
ARIZONA AZ NEVADA NV
ARKANSAS AR NEW HAMPSHIRE NH
CALIFORNIA CA NEW JERSEY NJ
COLORADO CO NEW MEXICO NM
CONNECTICUT CT NEW YORK NY
DELAWARE DE NORTH CAROLINA NC
DISTRICT OF COLUMBIA DC NORTH DAKOTA ND
FLORIDA FL OHIO OH
GEORGIA GA OKLAHOMA OK
HAWAII HI OREGON OR
IDAHO ID PENNSYLVANIA PA
ILLINOIS IL RHODE ISLAND RI
INDIANA IN SOUTH CAROLINA SC
IOWA IA SOUTH DAKOTA SD
KANSAS KS TENNESSEE TN
KENTUCKY KY TEXAS TX
LOUISIANA LA UTAH UT
MAINE ME VERMONT VT
MARYLAND MD VIRGINIA VA
MASSACHUSETTS MA WASHINGTON WA
MICHIGAN MI WEST VIRGINIA WV
MINNESOTA MN WISCONSIN WI
MISSISSIPPI MS WYOMING WY
MISSOURI MO
STATE ABBREVIATIONS
Use the following list to assist you in identifying a state when an abbreviation is given, or vice versa.
ADDITIONAL INFORMATION
If you have any questions or require additional information regarding distribution and Roth conversion requests involving state income
tax withholding, contact Pershing’s Retirement Plans Department. Use administrative wires to change standing instructions or address
inquiries for existing clients only. Present all other inquiries to your Customer Service Team.
Address: Fax Number: Administrative Wire:
Pershing (201) 413-5267 IRA # (DIST – Distributions)
Retirement Plans Department IRA # (JRNL – Roth Conversion)
Box 2060
Jersey City, New Jersey 07399
STWH-QR 4/01
Effective January 17, 2003, Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation changed its name to Pershing LLC.
Every use of Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corporation refers to Pershing LLC.
