IRS Posts Final Regulations on Withholding on Certain Distributions to Payees Outside the United States

The IRS has posted final regulations regarding income tax withholding on certain periodic payments and nonperiodic distributions from employer deferred compensation plans, individual retirement plans, and commercial annuities that are not eligible rollover distributions. The regulation addresses a payor’s obligation to withhold income taxes in the circumstances in which those payments or distributions are made to payees outside of the United States. It affects payors and payees of those distributions.

The guidance impacts Treas. Reg. 1.3405(e)-1, and are scheduled to be published October 21, 2024.