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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
It's more important than ever to be in compliance with payroll laws and regulations! How do you stay in compliance and avoid penalties? The APA Basic Guide to Payroll is written to make understanding the laws and regulations as easy as possible. And this single-volume guide is filled with tools to help you apply the law and make proper calculations – with ease!
The District of Columbia has enacted emergency legislation that provides for personal income tax withholding from a retirement distribution that is a lump-sum payment of a payee's entire account balance. Previously, withholding applied to any distribution from a retirement plan or retirement account if the distribution was subject to federal withholding.
Under the legislation, if a resident payee receives a payment from a retirement plan or retirement account that is a lump-sum distribution, income tax must be withheld on the lump-sum distribution by the payor at the highest individual income tax rate that is in effect at the time of the distribution.
The new withholding rules do not apply to (1) any portion of a lump-sum payment that was previously subject to tax, (2) an eligible rollover distribution that is effected as a direct trustee-to-trustee transfer, or (3) a rollover from an individual retirement account to a traditional or Roth individual retirement account that is effected as a direct trustee-to-trustee transfer.
A "lump-sum distribution" is a payment from a payor to a resident payee of the resident payee's entire account balance, exclusive of any other tax withholding and any administrative charges and fees. A "retirement account" or "retirement plan" is a qualified employee plan, a qualified employee annuity plan, a defined contribution plan, a defined benefit plan, a tax-sheltered annuity plan, an individual retirement account, any combination of the plans and account listed, or any similarly situated account or plan as defined by the federal law. (Act 19-316 (D.C.B. 19-698), Laws 2012, effective within 5 days of February 21, 2012, for a 90-day period that expires May 24, 2012.)
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