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IRA Withholding Notice and Election Requirements (Article)

With many of your members getting ready to take out their 2013 required minimum distributions (RMDs), now is the perfect time to brush up on the Individual Retirement Account (IRA) withholding notice and election requirements for credit unions. Withholding is an important compliance issue for IRAs. Like withholding from a paycheck, IRA distribution withholding prepays income taxes. Taxes withheld from IRA distributions are credited against an individual’s total tax liability for the year. So not only is withholding required by law, it’s a valuable customer service that you provide your members. 

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