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Is There a Way to Avoid the 20% Withholding Tax on My Retirement Plan Distribution?

April 26, 2017avoid distribution retirement plan tax withholding

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Is There a Way to Avoid the 20% Withholding Tax on My Retirement Plan Distribution?

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Yes. If your account balance is sent directly by the plan administrator to another qualified plan or to an IRA trustee/custodian on your behalf, the 20% withholding tax requirement does not apply. However, if you do not request a direct rollover of your distribution, 20% will be withheld for federal income taxes.