Rog.Dodge

I am trying to withdraw my old 401K. I am over 60 and there are no general restrictions on taking the full amount. However, I have completed a W8-BEN to avoid the 30% non US resident tax withholding as shown on some other thread in the forum. But the 401K company (Voya) are saying their bank still believe the withholding should be applied. Have the bank got this wrong? Or is my circumstance different for some reason? I can't talk directly to the bank and Voya are simply stating the banks edict on this. Any ideas how I can unblock this? Thanks

Rete

You will have to pay IRS federal and possibly state tax on that withdrawal regardless of where you live, i.e. in the US, the UK or elsewhere in the world. So I believe the bank is correct. You are not liable for the early withdrawal (before age 57-1/2) however.

The monies contributed to the 401K were contributed tax free and the interest/growth of the plan has risen without your having to pay taxes. As such, it is monies that were 'earned' while you were residing in the US and both you and the funds are liable for taxes. If you are still in the US, which you past posts indicate, even without the benefit of a green card you are still considered 'resident' for tax purposes.

Rog.Dodge

Rete, thanks, appreciate you sending the reply. I guess I wasn't aware that tax would be due, however isn't the withholding issue and the tax two separate issues? Is it true that there is a UK/US treaty which enables a situation where you can reduced the tax withholding to 0% even if subsequently on a tax return you may have to declare tax? I sold my home last year and there was no tax applicable but I did have 30% withheld on the sale simple because I didn't complete a 1088 which I know others have done to avoid the withholding. (I now live back in the UK since last April btw)