Tax Type
Employer Income Tax Withholding
Description
Qualified Retirement Plan
Topic
Withholding of Tax
Date Issued
03-05-1990
March 5, 1990
Re: Ruling Request/ Virginia Individual Withholding Tax
Distributions made from a Qualified Retirement Plan
Dear*****************
This will reply to your letter dated December 12, 1989 in which you request a ruling on the state income tax withholding and reporting requirements on retirement plan distributions.
Generally, Virginia imposes no reporting or withholding requirements on payors of retirement payments. However, if the recipient of a retirement payment wishes to have Virginia income tax withheld, and the payor agrees to voluntarily remit the withholding payments, the department will accept and process any such payments. Payors who voluntarily agree to submit income tax withholding are subject to the same accounting and reporting requirements as other payors of income tax withholding.
Unless Virginia withholding tax has actually been deducted from retirement plan distributions and submitted to the Department of Taxation, a plan administrator will not be required to file information returns Forms 1099R and W-2P with Virginia.
For years in which the Virginia tax has been deducted and withheld from retirement plan distributions, all forms W-2P showing Virginia withholding should be filed along with the Employer's Annual Reconciliation of Virginia Income Tax Withheld (Form VA-5), not later than January 31 of the following calendar year.
Under an agreement entered into by the Commonwealth of Virginia with the Federal government, information reported on Federal Information Return Form 1099R is made available to the Department of Taxation. The filing of such information returns with the Federal Government will therefore be deemed compliance with Virginia law.
I hope that the foregoing has responded to your inquiry. If you need any additional information, please contact the department.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner