What are the Tax rules in regards to distributions made to me?
A.Mandatory 20% Withholding Whenever you receive a Distribution from the Plan, other than periodic Annuity payments or installment payments of ten years or more, and there is no direct rollover to an IRA or another Qualified Plan, the IRS requires your Plan Administrator to withhold 20% of the Distribution. This 20% withholding is not a tax; it is credited to any future federal income tax that you may owe. This amount will automatically be deducted from the amount paid to you. Note: Your actual tax (if any) on the Distribution you receive will be computed on your federal income tax return for the year in which the distribution is made from your account. 10% Additional Penalty Tax Any payment of taxable money from your Account is generally subject to an additional 10% federal tax penalty if you take it out “early,” which is defined as: • Before you reach the age of 59 1/2. • For reasons other than permanent Disability or death. This penalty tax does not apply to the following types of p
