No. The former employer 401k administrator should only withhold 20% for federal income tax from eligible rollover distributions transferred to a Solo 401k. A 401k plan administrator doesn't have to apply withholding if expected distributions to an an individual are less than $200 for the year. The 20% withholding generally only applies to any previously untaxed amount of the eligible rollover distribution (not to any already taxed amount - cost). However, no withholding is required if the 401k plan directly rolls over (in a trustee-to-trustee transfer) the amount to another qualified retirement plan such as a self-Directed Solo 401k.
0 Comments
Leave a Reply. |
AuthorMark Nolan has been active in the 401k and IRA industry for over 18 years. Working as a 401k administrator at Nationwide Insurance Company; then working as a Compliance Officer and Manager at self-directed IRA/401k custodian companies such as Trust Administration Services Corporation (now owned by Equity Trust Company), to IRA Services Trust company. Mark is currently the Compliance Manager at MySolo401k.Net. Archives
July 2020
Categories
All
|