Aug 14, 2024
IRA Close or Withdrawal State IRA Withholding Requirements
Traditional IRA required state withholdings.
If you’re requesting to make a partial withdrawal from your Traditional Individual Retirement Account (IRA), or to close it completely, you’ll need to fill out a withdrawal form before the account can be closed. On this form, you must select your Federal and State tax withholding. Each state has different requirements which must be met before the withdrawal can be made. Keep reading to find out what your state requires.
Please note that if the State withholding field is not filled out correctly, your withdrawal may be rejected.
Refer to this table to determine the correct tax withholding for your state. If you would like to not withhold any funds for state taxes and you see a document necessary to do so in the chart below please download the form fill that out and send the completed document to us in an email to the address seen below and let us know you would not like to withhold state taxes in your withdrawal. If you withhold the required minimum amount you DO NOT need to fill out any forms.
If you have additional questions, please give us a call at 800-205-5164 from 8:00 a.m.-8:00 p.m. ET Monday-Friday, or email us at [email protected].
Roth IRAs do not require withholdings.
The State withholding requirements only apply to Traditional IRAs. Roth IRA distributions are not subject to mandatory federal or state withholding. However, you may elect withholding if you wish to do so.
Note that the Federal withholding will default to 10%, but you can adjust this amount.
Definitions:
Voluntary: State will allow tax withholding to be elected, and will only be taken if you instruct us to do so. Withholding is not required.
Mandatory: State requires the minimum state withholding to process your withdrawal if you have elected federal withholding. If no Federal withholding is elected, state withholding is optional, but still must meet the minimum state withholding listed.
Mandatory opt-out: State requires the minimum state withholding regardless of Federal withholding selected, but allows opting out if certain criteria are met. If you qualify and want to opt out, you must submit the form for your state to Stash requesting your opt out to begin withdrawal.
n/a: State does not allow withholding.
IF YOUR STATE REQUIRES AN OPT OUT FORM, CLICK THE LINK IN THE OPT-OUT FORM REQUIRED COLUMN TO DOWNLOAD THE FORM. You can then email the form to us at [email protected] once it’s completed. It may take up to three business days for us to process your form and begin the withdrawal process.
Please remember these requirements are for Traditional IRAs only. Roth IRA accounts do not have mandatory minimum withholding requirements.
State | Withholding Option | % Required | Opt-out Information/Required Forms(if applicable) |
|---|---|---|---|
Alabama | Voluntary | No minimum | There is no required minimum withholding. |
Alaska | n/a | n/a | There is no required minimum withholding. |
Arizona | Voluntary | 3.5% | There is no required minimum withholding. |
Arkansas | Mandatory opt-out | 3% | You must either withhold at least 3% for State Tax Withholding or fill out the form in the link and send us the completed document by email. AR-4P |
California | Voluntary | 10% of Federal withholdings1 | You do not need to withhold any funds for State Tax Withholding. However if you wish to it must be at least 10% of the amount you select for Federal Tax Withholding. |
Colorado | Voluntary | 4.40% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 4.40%. |
Connecticut | Mandatory opt-out | 6.99% | You must either withhold at least 6.99% for State Tax Withholding or fill out the form in the link and send us the completed document by email. CT-W4P |
Delaware | Voluntary | No minimum | There is no required minimum withholding. |
Florida | n/a | n/a | There is no required minimum withholding. |
Georgia | Voluntary | 5.39% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 5.39%. |
Hawai’i | n/a | n/a | There is no required minimum withholding. |
Idaho | Voluntary | 5.70% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 5.70%. |
Illinois | Voluntary | 4.95% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 4.95%. |
Indiana | Voluntary | No minimum | There is no required minimum withholding. |
Iowa | Mandatory opt-out2 | 5% | You must either withhold at least 5% for State Tax Withholding or fill out the form in the link and send us the completed document by email. (If you are 55 years old the form is not required) IA W-4P2 |
Kansas | Voluntary | No minimum | There is no required minimum withholding. |
Kentucky | Voluntary | 4% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 4%. |
Louisiana | Voluntary | No minimum | There is no required minimum withholding. |
Maine | Mandatory | 5% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 5%. |
Maryland | Voluntary | No minimum | There is no required minimum withholding. |
Massachusetts | Mandatory | 5% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 5%. |
Michigan | Voluntary | 4.25% | You must either withhold at least 4.25% for State Tax Withholding or fill out the form in the link and send us the completed document by email. MI-W4P |
Minnesota | Mandatory opt-out | 6.25% | You must either withhold at least 6.25% for State Tax Withholding or fill out the form in the link and send us the completed document by email. W-4MNP |
Mississippi | Voluntary | minimum | There is no required minimum withholding. |
Missouri | Voluntary | 4.70% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 4.70%. |
Montana | Voluntary | minimum | There is no required minimum withholding. |
Nebraska | Voluntary | 5% | You must withhold at least 5% for State Tax Withholding. |
Nevada | n/a | n/a | There is no required minimum withholding. |
New Hampshire | n/a | n/a | There is no required minimum withholding. |
New Jersey | Voluntary | No minimum | There is no required minimum withholding. |
New Mexico | Voluntary | No minimum | There is no required minimum withholding. |
New York | n/a | n/a | There is no required minimum withholding. |
North Carolina | Mandatory opt-out | 4% | You must either withhold at least 4% for State Tax Withholding or fill out the form in the link and send us the completed document by email. NC-4P |
North Dakota | Voluntary | No minimum | There is no required minimum withholding. |
Ohio | Voluntary | No minimum | There is no required minimum withholding. |
Oklahoma | Mandatory opt-out | 4.75% | You must either withhold at least 4.75% for State Tax Withholding or fill out the form in the link and send us the completed document by email. OK-W-4-R |
Oregon | Mandatory opt-out | 8% | You must either withhold at least 8% for State Tax Withholding or fill out the form in the link and send us the completed document by email. OR-W-4 |
Pennsylvania | n/a | n/a | There is no required minimum withholding. |
Rhode Island | Voluntary | No minimum | There is no required minimum withholding. |
South Carolina | Voluntary | No minimum | There is no required minimum withholding. |
South Dakota | n/a | n/a | There is no required minimum withholding. |
Tennessee | n/a | n/a | There is no required minimum withholding. |
Texas | n/a | n/a | There is no required minimum withholding. |
Utah | Voluntary | 4.55% | You do not need to withhold any funds for State Tax Withholding. However if you wish to, it must be at least 4.55%. |
Vermont | Mandatory | 30% of Federal withholdings3 | You do not need to withhold any funds for State Tax Withholding. However if you wish to it must be at least 30% of the amount you select for Federal Tax Withholding. |
Virginia | Voluntary | No minimum | There is no required minimum withholding. |
Washington | n/a | n/a | There is no required minimum withholding. |
Washington D.C. | Voluntary/Mandatory4 | No minimum/10.75%4 | There is no required minimum withholding if you are not fully closing your IRA account. However, if you are fully closing your IRA account you must withhold at least 10.75 % for State Tax Withholding. |
West Virginia | Voluntary | No minimum | There is no required minimum withholding. |
Wisconsin | Voluntary | No minimum | There is no required minimum withholding. |
Wyoming | n/a | n/a | There is no required minimum withholding. |
1 California: If you choose to waive federal withholding, you may still elect state withholding with no minimum requirement.
2 Iowa: If the IRA owner is 55 years of age by 12/31 in the year the distribution was taken, the state withholding rate can be waived without providing the IA W-4P. The minimum state withholding remains 5% if elected.
3 Vermont: If federal withholding is required by the IRS, then state withholding is mandatory. If you choose to waive federal withholding, you may still elect state withholding with no minimum requirement.
4 Washington DC: Washington DC allows Voluntary ‘No Minimum’ state withholding on partial distributions only. A mandatory 10.75% withholding rate must be elected for all total account distributions.
Written by
Team Stash
We want to turn money into a source of hope and opportunity. We teach people how to build good habits, save more and make it easy and affordable to get started investing. So far, we’ve helped over 6 million people create a more secure financial future with our expert advice and award winning investing app.
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