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Current Important Topics

Current Important Topics

IRS – Tax Withholding on IRAs

The IRS has announced several form changes that will impact tax withholding on
distributions from individual retirement accounts (IRSs).

Form W-4P (Revised Form):

  • Form Title – revised as follows:
    • Current Form – Withholding Certificate for Pension or Annuity Payments
    • Revised Form – Withholding Certificate for Periodic Pension or Annuity
  • Form Purpose – revised as follows:
    • Current Form – used for both “periodic” and “nonperiodic” distributions.
    • Revised Form – used only for “periodic” distributions

Form W-4R (New Form):

  • Form Title –
    • Withholding Certificate for Nonperiodic Payments and Eligible Rollover
  • Form Purpose –
    • Use only for “nonperiodic” distributions. Note: distributions form IRAs that
      are not invested in annuities are considered to be “nonperiodic”

Effective Date:

  • Tax Year 2022 – may use either (1) the “current” W-4P, or (2) the “revised” W-4P
  • Tax Year 2023 and Later – must use the “revised” W-4P and the “new” W-4R, as

Reference: 2021 & 2022 Form W-4P & 2022 Form W-4R

Emerging Issues

Child Health Savings Account Act / H.R. 6507

01/25/22 – Introduces in the House by Beth Van Dayne

Key Provisions:

  • Would permit the establishment of child health care savings
    accounts for the benefit of a taxpayer’s minor children.
  • Would provide for a tax deduction for amounts contributed up to
    $3,000 in a taxable year.
  • Would set forth rules for the taxation of distributions from such
    accounts for children under and over the age of 18 years and
    allows for exceptions to such rules in the case of the disability or
    death of a child.

Keeping Evictions Off Credit Reports Act / H.R. 6862
02/28/22 – Introduced in the House by Steve Cohen

Key Provisions:

  • Would prevent evictions related to the COVID-19 pandemic from
    appearing on credit reports (which would negatively affect a
    person’s future access to credit or housing).

Preventing Racial Profiling In Lending Act / H.R. 6802

02/18/22 – Introduced in the House by Roger Williams

Key Provisions:

  • Would prohibit Federal agencies from requiring lenders to estimate
    a borrower’s race or ethnicity via visual observation or surname
    when collection small business data under Section 1071 of the
    Dodd-Frank Act.

Questions & Answers