Jan 23, 2026
IRA Close or Withdrawal State IRA Withholding Requirements
Traditional IRA required state withholdings.
By Stash Team
Last updated: June 9, 2026
Withdrawing from a Traditional IRA is not just a transfer request. It is also a tax withholding decision. If the state withholding section of your IRA withdrawal form is blank, incomplete, or below your state’s required minimum, Stash may not be able to process the withdrawal until it is corrected.
This guide explains the state IRA withholding requirements Stash uses for Traditional IRA partial withdrawals and full account closures as of June 9, 2026. State rules can change, and withholding is not the same thing as your final tax bill. If you are unsure what to choose, consider speaking with a tax professional.
If you have additional questions, call us at 800-205-5164 from 8:00 a.m. to 8:00 p.m. ET Monday through Friday, or email support@stash.com.
What to know before you submit your IRA withdrawal form
Traditional IRAs: State withholding requirements may apply to taxable Traditional IRA distributions.
Roth IRAs: Roth IRA distributions do not have mandatory state or federal withholding requirements through Stash. You may still elect withholding if you wish.
Federal withholding: Federal withholding generally defaults to 10% for Traditional IRA withdrawals, but you may be able to change or waive this amount on your withdrawal form.
State of residence: Your state withholding requirement is based on the state of residence Stash has on file for you when the withdrawal is processed.
Partial withdrawal vs. full closure: Some jurisdictions treat a full IRA closure differently than a partial withdrawal. Washington D.C. is the key example in the table below.
Opt-out forms: If your state requires an opt-out form and you do not want state tax withheld, Stash needs the completed form before the withdrawal can begin.
If your state requires an opt-out form, click the link in the Opt-out information column below to access the form or state forms page. Once completed, email the form to support@stash.com. It may take up to three business days for us to process your form and begin the withdrawal process.
Withholding is a prepayment, not a final tax calculation
Think of tax withholding like paying part of a bill before the final total is known. It may help cover taxes you owe, but it does not prove that you withheld enough. It also does not mean you will owe nothing later.
Your final federal and state tax liability depends on your income, filing status, deductions, credits, age, type of IRA, and whether an early distribution penalty applies. Stash can help you understand the form. A tax professional can help you understand the tax outcome.
Definitions
Voluntary: State withholding is allowed but not required. If you choose to withhold, the amount must meet any minimum listed below.
Mandatory when federal withholding is elected: State withholding is required if you elect federal withholding. If you waive federal withholding, state withholding may be optional unless your state says otherwise.
Mandatory opt-out: State withholding is required unless you qualify to opt out and submit the required state form or certification.
n/a: State withholding is not available or is not applicable for Stash IRA withdrawals.
State IRA withholding requirements for Traditional IRA withdrawals
State | Withholding option | 2026 minimum or required amount | Opt-out information or required forms |
|---|---|---|---|
Alabama | Voluntary | No minimum | There is no required minimum withholding. |
Alaska | n/a | n/a | There is no required minimum withholding. |
Arizona | Voluntary | No required minimum | If you choose Arizona withholding, use one of the state-supported withholding percentages. |
Arkansas | Mandatory opt-out | 3% | You must either withhold at least 3% for state tax withholding or submit Arkansas Form AR-4P. |
California | Voluntary | 10% of federal withholding if elected | You are not required to withhold California tax. If you choose California withholding and federal withholding applies, the California amount must generally be at least 10% of the federal withholding amount. |
Colorado | Voluntary | 4.40% | You are not required to withhold Colorado tax. If you choose withholding, 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 submit Connecticut Form 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 | 5.19% | You are not required to withhold Georgia tax. If you choose withholding, it must be at least 5.19%. |
Hawai’i | n/a | n/a | There is no required minimum withholding. |
Idaho | Voluntary | 5.30% | You are not required to withhold Idaho tax. If you choose withholding, it must be at least 5.30%. |
Illinois | Voluntary | 4.95% | You are not required to withhold Illinois tax. If you choose withholding, it must be at least 4.95%. |
Indiana | Voluntary | No minimum | There is no required minimum withholding. |
Iowa | Mandatory opt-out | 5% | You must either withhold at least 5% for state tax withholding or submit Iowa Form IA W-4P. If you are age 55 or older by December 31 of the distribution year, you may be able to waive Iowa withholding without submitting the form. |
Kansas | Voluntary | No minimum | There is no required minimum withholding. |
Kentucky | Voluntary | 3.50% | You are not required to withhold Kentucky tax. If you choose withholding, it must be at least 3.50%. |
Louisiana | Voluntary | No minimum | There is no required minimum withholding. |
Maine | Mandatory when federal withholding is elected | 5% | If Maine withholding is required or elected, it must be at least 5%. |
Maryland | Voluntary | No minimum | There is no required minimum withholding. |
Massachusetts | Mandatory when federal withholding is elected | 5% | If Massachusetts withholding is required or elected, it must be at least 5%. |
Michigan | Mandatory opt-out | 4.25% | You must either withhold at least 4.25% for state tax withholding or submit Michigan Form MI W-4P. |
Minnesota | Mandatory opt-out | 6.25% | You must either withhold at least 6.25% for state tax withholding or submit Minnesota Form W-4MNP. |
Mississippi | Voluntary | No minimum | There is no required minimum withholding. |
Missouri | Voluntary | 4.70% | You are not required to withhold Missouri tax. If you choose withholding, it must be at least 4.70%. |
Montana | Voluntary | No minimum | There is no required minimum withholding. |
Nebraska | Mandatory when federal withholding is elected | 5% | If Nebraska withholding is required or elected, it must be at least 5%. |
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 through Stash. |
North Carolina | Mandatory opt-out | 3.99% | You must either withhold at least 3.99% for state tax withholding or submit North Carolina Form 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 | 4.50% | You must either withhold at least 4.50% for state tax withholding or submit Oklahoma Form OK-W-4-R. |
Oregon | Mandatory opt-out | 8% | You must either withhold at least 8% for state tax withholding or submit Oregon Form 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 | 4.50% | You are not required to withhold Utah tax. If you choose withholding, it must be at least 4.50%. |
Vermont | Mandatory when federal withholding is elected | 30% of federal withholding | If federal withholding is required or elected, Vermont withholding must generally be at least 30% of the federal withholding amount. If you waive federal withholding, you may still elect Vermont withholding with no minimum. |
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 for partial withdrawals; mandatory for full account closures | No minimum for partial withdrawals; 10.75% for full account closures | Washington D.C. allows voluntary withholding with no minimum on partial IRA distributions. If you are fully closing your IRA account, you must withhold at least 10.75%. |
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. |
Notes on specific states
California: If you waive federal withholding, you may still elect California withholding with no required minimum.
Iowa: If the IRA owner is age 55 or older by December 31 in the year the distribution is taken, Iowa retirement income rules may allow state withholding to be waived without submitting IA W-4P. If Iowa withholding is elected, the Stash minimum remains 5%.
Vermont: If federal withholding is required or elected, Vermont withholding is generally mandatory at 30% of the federal withholding amount. If federal withholding is waived, Vermont withholding may be elected with no minimum.
Washington D.C.: Washington D.C. allows voluntary state withholding with no minimum on partial IRA distributions. A mandatory 10.75% withholding rate applies to total account distributions.
Examples
Example 1: Your state requires an opt-out form
You live in Michigan and want to take a Traditional IRA withdrawal with no state tax withheld. Michigan is listed as mandatory opt-out. That means Stash needs either Michigan withholding of at least 4.25% or a completed Michigan Form MI W-4P before processing the withdrawal without state withholding.
Example 2: State withholding depends on federal withholding
You live in Vermont and choose 10% federal withholding on a Traditional IRA withdrawal. Vermont withholding is generally required at 30% of the federal withholding amount. If the federal withholding is $100, the Vermont withholding would generally need to be at least $30.
Example 3: Your state is voluntary
You live in Illinois. Illinois withholding is voluntary, but if you choose to withhold state tax through Stash, the amount must be at least 4.95%.
Frequently asked questions
Do IRA withdrawals require state tax withholding?
Sometimes. It depends on your state of residence, the type of IRA, whether the distribution is taxable, whether you elect federal withholding, and whether you are taking a partial withdrawal or fully closing the account.
Do Roth IRA withdrawals require state tax withholding?
No. Roth IRA withdrawals through Stash do not have mandatory federal or state withholding requirements. You may elect withholding if you want to, but the minimums in the table are for Traditional IRA withdrawals.
What happens if I leave the state withholding section blank?
Your withdrawal may be rejected or delayed. If your state requires withholding or an opt-out form, Stash needs the correct withholding election or completed form before processing your withdrawal.
Can I choose not to have state taxes withheld from my Traditional IRA withdrawal?
In many states, yes. Some states let you opt out by selecting no state withholding. Other states require a completed opt-out form before Stash can process the withdrawal without state withholding.
Why does federal withholding default to 10%?
Traditional IRA distributions are generally subject to federal withholding unless you elect a different amount or waive withholding when allowed. Stash’s withdrawal form defaults federal withholding to 10%, but you may be able to adjust it.
Which state’s withholding rules apply if I moved?
Stash uses the state of residence on your account when your withdrawal is processed. If you recently moved, update your Stash account information before submitting your withdrawal request.
Is state withholding the same as paying my state taxes?
No. Withholding is a prepayment toward possible tax. Your actual state tax may be higher or lower when you file your return.
Does withholding cover the IRS early withdrawal penalty?
Not necessarily. If you take a taxable IRA distribution before age 59½, an additional IRS early withdrawal tax may apply unless an exception applies. Federal and state withholding may not cover that amount.
Why is my IRA withdrawal delayed after I submitted the form?
Common reasons include a missing state withholding election, a withholding percentage below your state minimum, an outdated address, or a missing opt-out form. If Stash needs more information, we will let you know what is required to continue processing the request.
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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