State Tax Withholding Guidelines

What you need to know

If you request a distribution from your Individual Retirement Account (IRA) and you do not make an election regarding state tax withholding, your clearing broker will withhold (if required) at the maximum rate based on your state of residency.

Please note: If the distribution is from a Roth IRA, it may be exempt from state tax. State tax will only be withheld from your Roth IRA if you indicate this in the State Withholding Election section of the Roth IRA Distribution Request form.

If you reside in: AK, DC, FL, HI, NH, NV, SD, TN, TX, WA, WY, STATE INCOME TAX WITHHOLDING IS PROHIBITED.

State income tax will not be withheld from your distribution if you reside in these states, even if you elect to withhold state income tax.

If you reside in: AL, AR, AZ, CA, CO, CT, ID, IL, IN, KS, KY, MD, MI, MN, MO, MS, MT, NJ, ND, NM, NY, OH, PA, RI, SC, UT, VA, WV, WI, STATE INCOME TAX WITHHOLDING IS VOLUNTARY.

State income tax will be withheld only if you instruct us to do so. If you want state income taxes to be withheld, you must indicate the amount or percentage.

CA residents: If you fail to make an election regarding state tax withholding, we will automatically withhold 10% of your federal income tax withheld to satisfy the state tax withholding amount.

CO, CT and MD residents: Your clearing broker requires tax withholding amounts to be requested in whole dollar amounts for residents of the states of CO, CT and MD. CT residents cannot elect less than $10 if they choose to withhold. MD residents cannot elect less than $5 if they choose to withhold.

If you reside in: GA or OR STATE INCOME TAX WITHHOLDING IS MANDATORY

State income tax will be withheld regardless of federal income tax election, unless you elect not to withhold. If you make no election, it will be withheld at the maximum rate of:

If you reside in: DE, IA, LA, MA, ME, NC, NE, OK or VT, STATE INCOME TAX WITHHOLDING IS MANDATORY WHEN FEDERAL INCOME TAX IS WITHHELD. You must elect to withhold state income tax when federal income tax is withheld from your distribution. If you do not make an election, it will be withheld at the maximum rate of:

Contact your tax professional before making any election regarding state withholding. State law is subject to changes that may affect the accuracy of this communication.