State and Federal Withholding
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Portico supports withholding for state and federal income taxes. All withdrawal transactions support state and Federal withholding fields. The withholding amounts may be manually or system calculated. Withholding does not apply to Coverdell ESAs.
Withdrawal transactions support state withholding with the following considerations:
- YTD State W/H fields on the Withholding Maintenance dialog box are updated with the state withholding amounts
- State Withholding elections and amounts are maintained on the IRA Profile dialog box.
IRA Federal and state withholding amounts are stored on the IRAs tab when the Federal Withholding and State Withholding check boxes are selected on the IRA Profile dialog box. The member's selection of withholding percentages and flat amounts will override the credit union's default percentages.
Online calculations for state withholding will be based on the percentage or the flat amount from the IRA Profile dialog box, not both:
| If the Calculate State field on the Credit Union Profile – Shares tab is | If the State Withholding check box on the IRA Profile dialog box is | If the Percentage or Flat Amount fields on the IRA Profile dialog box are | Then Portico will... |
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Zero or greater |
Selected |
Greater than zero |
Calculate state withholding based on the percentage or flat amount the member has elected to pay |
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Greater than zero |
Selected |
Zero |
Calculate state withholding based on the percentage from the Credit Union Profile – Shares tab |
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Zero |
Selected or Not Selected |
Zero |
Not calculate state withholding |
Online calculations for Federal withholding will be based on the percentage or the flat amount from the IRA Profile dialog box, not both.
| If the Calculate Federal check box on the Credit Union Profile – Shares tab is | If the Federal Withholding check box on the IRA Profile dialog box is | If the Percentage or Flat Amount fields on the IRA Profile dialog box are | Then Portico will... |
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Selected or Not Selected |
Selected |
Greater than zero |
Calculate Federal withholding based on the percentage or flat amount the member has elected to pay |
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Not Selected |
Selected |
Zero |
Calculate Federal withholding using the default percentage of 10% |
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Not Selected |
Not Selected |
Zero |
Not calculate Federal withholding |
Withholding amounts can be automatically calculated based on the following guidelines:
- You are prompted to accept the calculated withholding amounts and may elect to change the withholding amount to zero.
- Withholding will be automatically calculated on the following taxable distribution codes: 1, J, 2, 3, 4, 7, G, and Q.
- Withholding will not be automatically calculated for the following distribution codes: IT, TO, 81, N, R, P, P1, NM, EC, PJ, 8, and 8J.
Non-Teller Administration and Basic Teller Administration branches can designate withholding GLs using the Federal GL Account and State GL Account fields in the IRA section on the Credit Union Profile – Shares tab.