Questions and Answers
One of our IRA owner’s IRA Certificate of Deposit has matured. If he wants to take a distribution and we make a check payable to him, can he put it back into an IRA? Do we have to withhold the required 20 percent for federal income tax?
An individual may roll over an IRA distribution to an IRA within 60 calendar days without tax consequence. IRA withholding rules allow an IRA owner to waive the 10 percent withholding that would otherwise apply to an IRA distribution. The mandatory 20 percent withholding applies to distributions from employer-sponsored retirement plans and is therefore not applicable in this situation.
(Posted: 05/21/2008)
