The IRS has issued three updated certificates relevant to withholding for pension plans and certain payments. Two are for use in 2022, and one is for use for 2021 reporting.
2022 Form W-4P
Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments, is used in order for the correct amount of federal income tax to be withheld from periodic payments from pensions, annuities and IRAs, as well as profit-sharing and stock bonus plans.
Periodic payments are made in installments at regular intervals (for example, annually, quarterly, or monthly) over a period of more than one year. Federal income tax withholding applies to the taxable part of these payments.
2022 Form W-4R
Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, is used in order for the correct amount of federal income tax to be withheld from nonperiodic payment or eligible rollover distributions from an employer retirement plan, annuity (including a commercial annuity) or IRA.
2021 Form W-4P
Form W-4P, Withholding Certificate for Pension or Annuity Payments, is for use by U.S. citizens, resident aliens or their estates who are recipients of pensions, annuities (including commercial annuities), and certain other deferred compensation, including 457(b) plans. It also may be used to choose:
- not to have any federal income tax withheld from the payment (except for eligible rollover distributions or for payments to U.S. citizens to be delivered outside the United States or its possessions), or
- to have an additional amount of tax withheld.
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