Tax Type
Employer Income Tax Withholding
Description
"Wages' defined; Profit sharing payments
Topic
Withholding of Tax
Date Issued
06-06-1985
June 6, 1985
RE: Ruling Request: Withholding
Dear ****
This will reply to your letter of May 2, 1985, concerning Virginia laws on the 401(k) deferred compensation plan.
Virginia Regulations § 630-6-460 7. (copy enclosed) exempts from withholding tax any remuneration paid to, or on behalf of, an employee or his beneficiary from or to a qualified cash or deferred arrangement meeting the requirements of I.R.C. § 401(k) which is exempt from tax under I.R.C.§ 501(a) at the time of such payment (unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust). Please note, however, that disbursements from the plan to the employee, although not subject to withholding tax, will be subject to income tax to the extent included in federal adjusted gross income, and any lump sum distribution from the plan may be subject to the special provisions of Virginia Code §58.1-322B.4.(Copy enclosed).
Sincerely,
W. H. Forst
Tax Commissioner
RE: Ruling Request: Withholding
Dear ****
This will reply to your letter of May 2, 1985, concerning Virginia laws on the 401(k) deferred compensation plan.
Virginia Regulations § 630-6-460 7. (copy enclosed) exempts from withholding tax any remuneration paid to, or on behalf of, an employee or his beneficiary from or to a qualified cash or deferred arrangement meeting the requirements of I.R.C. § 401(k) which is exempt from tax under I.R.C.§ 501(a) at the time of such payment (unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust). Please note, however, that disbursements from the plan to the employee, although not subject to withholding tax, will be subject to income tax to the extent included in federal adjusted gross income, and any lump sum distribution from the plan may be subject to the special provisions of Virginia Code §58.1-322B.4.(Copy enclosed).
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner