IRA sponsors (i.e., financial organizations) must provide Traditional (including SEP and SIMPLE) IRA distribution recipients with IRS-required information about federal income tax withholding. While IRS Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments, is used only for annuitized distributions from an IRA annuity, IRS Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, is used for all other Traditional IRA distributions (usually subject to a flat withholding rate of 10% unless another rate is elected or withholding is waived by the IRA holder (i.e., IRA owner or beneficiary)).
Because the instructions for the Form W-4R contain Marginal Tax Rate Tables (with figures subject to annual cost-of-living adjustments), the form is updated by the IRS each year. On December 12, 2023, the IRS released the 2024 version of Form W-4R.
2024 IRS Deadline
Typically, a substitute Form W-4R is included on the back of IRA distribution forms. The IRS has released requirements in Publication 15-A, Employer’s Supplemental Tax Guide, for use in 2024, for paper substitutes to Form W-4R, and also for electronic systems set up as a substitute to the paper Form W-4R. Publication 15-A also provides that IRA sponsors must update their forms incorporating the changes made to the 2024 Form W-4R by the later of January 1, 2024, or 30 days after the IRS releases the final version of the 2024 Form W-4R. Therefore, IRA sponsors have until January 11, 2024 (30 days after December 12, 2023) to begin using the 2024 version of the form.
PMC’s Electronic Form clients were emailed updated forms and documents with the 2024 version of the form on December 18, 2023. Contact PMC for information on our electronic forms program by calling 800-233-3207.