EXXONMOBIL SAVINGS PLAN Hardship Withdrawal Frm Name: Sc. Sec #: Wrk Phne: ( ) Hme Phne ( ) Yu may request a hardship withdrawal when yur financial need cannt be met thrugh: Reimbursement r cmpensatin by insurance r ther surce. Liquidatin f yur assets. Liquidatin f yur spuse s r minr children s assets. Ceasing cntributins t the ExxnMbil Savings Plan. Other distributins r lans frm plans maintained by the emplyer r any ther emplyer. Brrwing frm cmmercial surces n reasnable cmmercial terms. Reasn fr Withdrawal I have incurred a financial hardship that cannt be met by any ther financial resurces, and therefre I am requesting a withdrawal frm my accunt fr the reasn indicated belw. The amunt I am requesting is nt mre than the amunt necessary t defray the expenses I have incurred, and I cannt fully r partially satisfy these expenses thrugh a lan frm the Savings Plan r cmmercial lender, r by taking a withdrawal frm the Savings Plan. I understand that, effective upn the date f my withdrawal, I will be cmpletely suspended frm cntributing t all plans spnsred by the Cmpany and receiving an emplyer match cntributin fr six mnths. I als understand that my dividend passthrugh electin will be set t 100% passthrugh. I have attached prf f my financial hardship and all ther pertinent data. Place a check mark next t the apprpriate reasn: Expenses fr medical care 1 fr me, my spuse r my dependents 2. * Attach cpies f insurance statements r medical bills shwing patient csts nt reimbursed within the previus 6 mnths. Payment f tuitin, related educatinal fees, and rm and bard expenses, fr the next 12 mnths f pst-secndary educatin (paid r nt paid) fr me, my spuse, my children r my dependents 2. Write relatinship in the space prvided. * Attach bill r statement frm schl that specifies the amunt due; shw reasnable additinal misc. expense (bks, rm & bard, lab fees, etc.). Prper dcumentatin wuld include a bill r receipts with name f cllege n it, lease agreement that specifies dllar amunt need, etc. Payments necessary t prevent evictin frm my principal residence r freclsure n the mrtgage f my principal residence. * Attach evictin ntice r freclsure pleading r letters frm mrtgage cmpany within the previus 6 mnths specifying the dllar amunt needed. Funeral expenses fr my spuse r my dependents 2. Write relatinship in the space prvided. * Attach cpy f funeral bill within the previus 6 mnths. 1 Medical Care as defined in sectin 213(d) f the Internal Revenue Cde f 1986 2 Dependent as defined in sectin 152 f the Internal Revenue Cde f 1986 10/04/2016 EM300700HARDSHN
EXXONMOBIL SAVINGS PLAN Hardship Withdrawal Frm Withdrawal Amunt Requested Based n the dcumentatin prvided, my financial need is $ funds in my Befre-Tax accunt t satisfy this withdrawal.. I have verified that I have sufficient Nte: if yur available hardship withdrawal amunt based n yur current accunt balance is less than the financial need specified abve, the hardship will be prcessed up t the amunt available. Vluntary Tax Withhlding (Please check ne) I want t increase the withdrawal t cver the taxes t be withheld (if mnies are available) If yu d nt make this selectin, the net check may nt cver the financial need as listed. 10% will be withheld frm yur withdrawal. OR 0%. I understand that I am electing t have n withhlding OR Other %. Please specify the % f federal taxes t be withheld frm yur distributin. Yu may elect t have less than 10% r greater than 10% withheld. Payments t nn-resident aliens are subject t a 30% federal withhlding tax, and U.S. persns with a residential mailing address utside the United States may be subject t a 30% federal withhlding tax, unless they are eligible fr a reduced rate r exemptin under a tax treaty and the required IRS tax frms are submitted. If yur paycheck is depsited directly int yur bank accunt, yur hardship withdrawal, nce apprved and prcessed, will be depsited in the same way if a Savings Plan EFT electin is in effect. Otherwise, a check will be sent t yur address n recrd. Empyee Authrizatin: I certify that I have read and understand the cntents f this frm and further certify, under penalty f perjury, that t the best f my knwledge and belief the infrmatin prvided n this frm, including the Scial Security Number r Taxpayer Identificatin Number, is accurate and cmplete. I als certify I have received and read the Special Tax Infrmatin Ntice within the last 90 days and waive my right t wait 30 days prir t requesting this withdrawal. I authrize a distributin frm my Plan accunt as a hardship withdrawal in accrdance with the electins I have indicated abve. EMPLOYEE'S SIGNATURE DATE Send cmpleted frm t: Vya Financial ExxnMbil Savings Plan, PO Bx 24747, Jacksnville, FL 32241-4747. Fr vernight delivery: Vya Financial, ExxnMbil Savings Plan, 8900 Prminence Parkway, Jacksnville, FL 32256-8264 10/04/2016 EM300700HARDSHN
Special Tax Ntice Yur Rllver Optins fr Payments frm a Designated Rth Accunt Yu are receiving this ntice in the event that all r a prtin f a payment yu are receiving frm the ExxnMbil Savings Plan ( Plan ) is eligible t be rlled ver t a Rth IRA r designated Rth accunt in an emplyer plan. This ntice is intended t help yu decide whether t d a rllver. In the Plan, the Rth 401(k) Accunt, the Rth Rllver Accunt, and the Rth Cnversin Accunt are cllectively a designated Rth accunt. This ntice describes the rllver rules that apply t payments frm the Plan that are frm a designated Rth accunt. The Plan administratr r the pay r will tell yu the amunt that is being paid frm a designated Rth accunt. Hw can a rllver affect my taxes? GENERAL INFORMATION ABOUT ROLLOVERS After-tax cntributins included in a payment frm a designated Rth accunt are nt taxed, but earnings might be taxed. The tax treatment f earnings included in the payment depends n whether the payment is a qualified distributin. If a payment is nly part f yur designated Rth accunt, the payment will include an allcable prtin f the earnings in yur designated Rth accunt. If the payment frm the Plan is nt a qualified distributin and yu d nt d a rllver t a Rth IRA r a designated Rth accunt in an emplyer plan, yu will be taxed n the earnings in the payment. If yu are under age 59½, a 10% additinal incme tax n early distributins will als apply t the earnings (unless an exceptin applies). Hwever, if yu d a rllver, yu will nt have t pay taxes currently n the earnings and yu will nt have t pay taxes later n payments that are qualified distributins. If the payment frm the Plan is a qualified distributin, yu will nt be taxed n any part f the payment even if yu d nt d a rllver. If yu d a rllver, yu will nt be taxed n the amunt yu rll ver and any earnings n the amunt yu rll ver will nt be taxed if paid later in a qualified distributin. A qualified distributin frm a designated Rth accunt in the Plan is a payment made after yu are age 59½ (r after yur death r disability) and after yu have had a designated Rth accunt in the Plan fr at least 5 years. In applying the 5-year rule, yu cunt frm January 1 f the year yur first cntributin was made t the designated Rth accunt. Hwever, if yu did a direct rllver t a designated Rth accunt in the Plan frm a designated Rth accunt in anther emplyer plan, yur participatin will cunt frm January 1 f the year yur first cntributin was made t the designated Rth accunt in the Plan r, if earlier, t the designated Rth accunt in the ther emplyer plan. Where may I rll ver the payment? Yu may rll ver the payment t either a Rth IRA (a Rth individual retirement accunt r Rth individual retirement annuity) r a designated Rth accunt in an emplyer plan (a tax-qualified plan r sectin 403(b) plan) that will accept the rllver. The rules f the Rth IRA r emplyer plan that hlds the rllver will determine yur investment ptins, fees, and rights t payment frm the Rth IRA r emplyer plan (fr example, n spusal cnsent rules apply t Rth IRAs and Rth IRAs may nt prvide lans). Further, the amunt rlled ver will becme subject t the tax rules that apply t the Rth IRA r the designated Rth accunt in the emplyer plan. In general, these tax rules are similar t thse described elsewhere in this ntice, but differences include: If yu d a rllver t a Rth IRA, all f yur Rth IRAs will be cnsidered fr purpses f determining whether yu have satisfied the 5-year rule (cunting frm January 1 f the year fr which yur first cntributin was made t any f yur Rth IRAs). If yu d a rllver t a Rth IRA, yu will nt be required t take a distributin frm the Rth IRA during yur lifetime and yu must keep track f the aggregate amunt f the aftertax cntributins in all f yur Rth IRAs (in rder t determine yur taxable incme fr later Rth IRA payments that are nt qualified distributins). Eligible rllver distributins frm a Rth IRA can nly be rlled ver t anther Rth IRA. Hw d I d a rllver? There are tw ways t d a rllver. Yu can either d a direct rllver r a 60-day rllver. If yu d a direct rllver, the Plan will make the payment directly t yur Rth IRA r designated Rth accunt in an emplyer plan. Yu shuld cntact the Rth IRA spnsr r the administratr f the emplyer plan fr infrmatin n hw t d a direct rllver. If yu d nt d a direct rllver, yu may still d a rllver by making a depsit within 60 days int a Rth IRA, whether the payment is a qualified r nnqualified distributin. In additin, yu can d a rllver by making a depsit within 60 days int a designated Rth accunt in an emplyer plan if the payment is a 1
nnqualified distributin and the rllver des nt exceed the amunt f the earnings in the payment. Yu cannt d a 60-day rllver t an emplyer plan f any part f a qualified distributin. If yu receive a distributin that is a nnqualified distributin and yu d nt rll ver an amunt at least equal t the earnings allcable t the distributin, yu will be taxed n the amunt f thse earnings nt rlled ver, including the 10% additinal incme tax n early distributins if yu are under age 59½ (unless an exceptin applies). If yu d a direct rllver f nly a prtin f the amunt paid frm the Plan and a prtin is paid t yu, each f the payments will include an allcable prtin f the earnings in yur designated Rth accunt. If yu d nt d a direct rllver and the payment is nt a qualified distributin, the Plan is required t withhld 20% f the earnings fr federal incme taxes (up t the amunt f cash and prperty received ther than emplyer stck). This means that, in rder t rll ver the entire payment in a 60-day rllver t a Rth IRA, yu must use ther funds t make up fr the 20% withheld. Hw much may I rll ver? If yu wish t d a rllver, yu may rll ver all r part f the amunt eligible fr rllver. Any payment frm the Plan is eligible fr rllver, except: Certain payments spread ver a perid f at least 10 years r ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Required minimum distributins after age 70½ (r after death) Hardship distributins ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Lans treated as deemed distributins (fr example, lans in default due t missed payments befre yur emplyment ends) The Plan administratr r the payr can tell yu what prtin f a payment is eligible fr rllver. If I dn t d a rllver, will I have t pay the 10% additinal incme tax n early distributins? If a payment is nt a qualified distributin and yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins with respect t the earnings allcated t the payment that yu d nt rll ver (including amunts withheld fr incme tax), unless ne f the exceptins listed belw applies. This tax is in additin t the regular incme tax n the earnings nt rlled ver. The 10% additinal incme tax des nt apply t the fllwing payments frm the Plan: Payments made after yu separate frm service if yu will be at least age 55 in the year f the separatin Payments that start after yu separate frm service if paid at least annually in equal r clse t equal amunts ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Payments made due t disability Payments after yur death Payments f ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Payments made directly t the gvernment t satisfy a federal tax levy Payments made under a qualified dmestic relatins rder (QDRO) Payments up t the amunt f yur deductible medical expenses If I d a rllver t a Rth IRA, will the 10% additinal incme tax apply t early distributins frm the IRA? If yu receive a payment frm a Rth IRA when yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins n the earnings paid frm the Rth IRA, unless an exceptin applies r the payment is a qualified distributin. In general, the exceptins t the 10% additinal incme tax fr early distributins frm a Rth IRA listed abve are the same as the exceptins fr early distributins frm a plan. Hwever, there are a few differences fr payments frm a Rth IRA, including: There is n special exceptin fr payments after separatin frm service. The exceptin fr qualified dmestic relatins rders (QDROs) des nt apply (althugh a special rule applies under which, as part f a divrce r separatin agreement, a tax-free transfer may be made directly t a Rth IRA f a spuse r frmer spuse). The exceptin fr payments made at least annually in equal r clse t equal amunts ver a specified perid applies withut regard t whether yu have had a separatin frm service. 2
There are additinal exceptins fr (1) payments fr qualified higher educatin expenses, (2) payments up t $10,000 used in a qualified first-time hme purchase, and (3) payments after yu have received unemplyment cmpensatin fr 12 cnsecutive weeks (r wuld have been eligible t receive unemplyment cmpensatin but fr self-emplyed status). Will I we State incme taxes? This ntice des nt describe any State r lcal incme tax rules (including withhlding rules). If yu miss the 60-day rllver deadline SPECIAL RULES AND OPTIONS Generally, the 60-day rllver deadline cannt be extended. Hwever, the IRS has the limited authrity t waive the deadline under certain extrardinary circumstances, such as when external events prevented yu frm cmpleting the rllver by the 60-day rllver deadline. T apply fr a waiver, yu must file a private letter ruling request with the IRS. Private letter ruling requests require the payment f a nnrefundable user fee. Fr mre infrmatin, see IRS Publicatin 590, Individual Retirement Arrangements (IRAs). If yur payment includes emplyer stck that yu d nt rll ver If yu receive a payment that is nt a qualified distributin and yu d nt rll it ver, yu can apply a special rule t payments f emplyer stck (r ther emplyer securities) that are paid in a lump sum after separatin frm service (r after age 59½, disability, r the participant s death). Under the special rule, the net unrealized appreciatin n the stck included in the earnings in the payment will nt be taxed when distributed t yu frm the Plan and will be taxed at capital gain rates when yu sell the stck. If yu d a rllver t a Rth IRA fr a nnqualified distributin that includes emplyer stck (fr example, by selling the stck and rlling ver the prceeds within 60 days f the distributin), yu will nt have any taxable incme and the special rule relating t the distributed emplyer stck will nt apply t any subsequent payments frm the Rth IRA r emplyer plan. Net unrealized appreciatin is generally the increase in the value f the emplyer stck after it was acquired by the Plan. The Plan administratr can tell yu the amunt f any net unrealized appreciatin. If yu receive a payment that is a qualified distributin that includes emplyer stck and yu d nt rll it ver, yur basis in the stck (used t determine gain r lss when yu later sell the stck) will equal the fair market value f the stck at the time f the payment frm the Plan. If yu have an utstanding lan that is being ffset If yu have an utstanding lan frm the Plan, yur Plan benefit may be ffset by the amunt f the lan, typically when yur emplyment ends. The lan ffset amunt is treated as a distributin t yu at the time f the ffset and, if the distributin is a nnqualified distributin, the earnings in the lan ffset will be taxed (including the 10% additinal incme tax n early distributins, unless an exceptin applies) unless yu d a 60-day rllver in the amunt f the earnings in the lan ffset t a Rth IRA r designated Rth accunt in an emplyer plan. If yu receive a nnqualified distributin and yu were brn n r befre January 1, 1936 If yu were brn n r befre January 1, 1936, and receive a lump sum distributin that is nt a qualified distributin and that yu d nt rll ver, special rules fr calculating the amunt f the tax n the earnings in the payment might apply t yu. Fr mre infrmatin, see IRS Publicatin 575, Pensin and Annuity Incme. If yu are nt a plan participant Payments after death f the participant. If yu receive a distributin after the participant s death that yu d nt rll ver, the distributin will generally be taxed in the same manner described elsewhere in this ntice. Hwever, whether the payment is a qualified distributin generally depends n when the participant first made a cntributin t the designated Rth accunt in the Plan. Als, the 10% additinal incme tax n early distributins and the special rules fr public safety fficers d nt apply, and the special rule described under the sectin If yu receive a nnqualified distributin and yu were brn n r befre January 1, 1936, applies nly if the participant was brn n r befre January 1, 1936. If yu are a surviving spuse. If yu receive a payment frm the Plan as the surviving spuse f a deceased participant, yu have the same rllver ptins that the participant wuld have had, as described elsewhere in this ntice. In additin, if yu chse t d a rllver t a Rth IRA, yu may treat the Rth IRA as yur wn r as an inherited Rth IRA. A Rth IRA yu treat as yur wn is treated like any ther Rth IRA f yurs, s that yu will nt have t receive any required minimum distributins during yur lifetime and earnings paid t yu in a 3
nnqualified distributin befre yu are age 59½ will be subject t the 10% additinal incme tax n early distributins (unless an exceptin applies). If yu treat the Rth IRA as an inherited Rth IRA, payments frm the Rth IRA will nt be subject t the 10% additinal incme tax n early distributins. An inherited Rth IRA is subject t required minimum distributins. If the participant had started taking required minimum distributins frm the Plan, yu will have t receive required minimum distributins frm the inherited Rth IRA. If the participant had nt started taking required minimum distributins, yu will nt have t start receiving required minimum distributins frm the inherited Rth IRA until the year the participant wuld have been age 70½. If yu are a surviving beneficiary ther than a spuse. If yu receive a payment frm the Plan because f the participant s death and yu are a designated beneficiary ther than a surviving spuse, the nly rllver ptin yu have is t d a direct rllver t an inherited Rth IRA. Payments frm the inherited Rth IRA, even if made in a nnqualified distributin, will nt be subject t the 10% additinal incme tax n early distributins. Yu will have t receive required minimum distributins frm the inherited Rth IRA. Payments under a qualified dmestic relatins rder. If yu are the spuse r a frmer spuse f the participant wh receives a payment frm the Plan under a qualified dmestic relatins rder (QDRO), yu generally have the same ptins the participant wuld have (fr example, yu may rll ver the payment as described in this ntice). If yu are a nnresident alien If yu are a nnresident alien and yu d nt d a direct rllver t a U.S. IRA r U.S. emplyer plan, instead f withhlding 20%, the Plan is generally required t withhld 30% f the payment fr federal incme taxes. If the amunt withheld exceeds the amunt f tax yu we (as may happen if yu d a 60-day rllver), yu may request an incme tax refund by filing Frm 1040NR and attaching yur Frm 1042-S. See Frm W-8BEN fr claiming that yu are entitled t a reduced rate f withhlding under an incme tax treaty. Fr mre infrmatin, see als IRS Publicatin 519, U.S. Tax Guide fr Aliens, and IRS Publicatin 515, Withhlding f Tax n Nnresident Aliens and Freign Entities. Other special rules If a payment is ne in a series f payments fr less than 10 years, yur chice whether t make a direct rllver will apply t all later payments in the series (unless yu make a different chice fr later payments). If yur payments fr the year (nly including payments frm the designated Rth accunt in the Plan) are less than $200, the Plan is nt required t allw yu t d a direct rllver and is nt required t withhld fr federal incme taxes. Hwever, yu can d a 60-day rllver. Yu may have special rllver rights if yu recently served in the U.S. Armed Frces. Fr mre infrmatin, see IRS Publicatin 3, Armed Frces Tax Guide. FOR MORE INFORMATION Yu may wish t cnsult with the Plan administratr r payr, r a prfessinal tax advisr, befre taking a payment frm the Plan. Als, yu can find mre detailed infrmatin n the federal tax treatment f payments frm emplyer plans in: IRS Publicatin 575, Pensin and Annuity Incme; IRS Publicatin 590, Individual Retirement Arrangements (IRAs); and IRS Publicatin 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publicatins are available frm a lcal IRS ffice, n the web at www.irs.gv, r by calling 1-800-TAX- FORM. 4
Yur Rllver Optins fr Payments Nt frm a Designated Rth Accunt Yu are receiving this ntice in the event that all r a prtin f a payment yu are receiving frm the ExxnMbil Savings Plan ( Plan ) is eligible t be rlled ver t an IRA r an emplyer plan. This ntice is intended t help yu decide whether t d such a rllver. This ntice describes the rllver rules that apply t payments frm the Plan that are nt frm a designated Rth accunt (a type f accunt with special tax rules in sme emplyer plans). In the Plan, the Rth 401(k) Accunt, the Rth Rllver Accunt, and the Rth Cnversin Accunt are cllectively a designated rth accunt. The Plan administratr r the payr will tell yu the amunt that is nt being paid frm a designated rth accunt. Rules that apply t mst payments frm a plan are described in the General Infrmatin Abut Rllvers sectin. Special rules that nly apply in certain circumstances are described in the Special Rules and Optins sectin. Hw can a rllver affect my taxes? GENERAL INFORMATION ABOUT ROLLOVERS Yu will be taxed n a payment frm the Plan if yu d nt rll it ver. If yu are under age 59½ and d nt d a rllver, yu will als have t pay a 10% additinal incme tax n early distributins (unless an exceptin applies). Hwever, if yu d a rllver, yu will nt have t pay tax until yu receive payments later and the 10% additinal incme tax will nt apply if thse payments are made after yu are age 59½ (r if an exceptin applies). Where may I rll ver the payment? Yu may rll ver the payment t either an IRA (an individual retirement accunt r individual retirement annuity) r an emplyer plan (a tax-qualified plan, sectin 403(b) plan, r gvernmental sectin 457(b) plan) that will accept the rllver. The rules f the IRA r emplyer plan that hlds the rllver will determine yur investment ptins, fees, and rights t payment frm the IRA r emplyer plan (fr example, n spusal cnsent rules apply t IRAs and IRAs may nt prvide lans). Further, the amunt rlled ver will becme subject t the tax rules that apply t the IRA r emplyer plan. Hw d I d a rllver? There are tw ways t d a rllver. Yu can d either a direct rllver r a 60-day rllver. If yu d a direct rllver, the Plan will make the payment directly t yur IRA r an emplyer plan. Yu shuld cntact the IRA spnsr r the administratr f the emplyer plan fr infrmatin n hw t d a direct rllver. If yu d nt d a direct rllver, yu may still d a rllver by making a depsit int an IRA r eligible emplyer plan that will accept it. Yu will have 60 days after yu receive the payment t make the depsit. If yu d nt d a direct rllver, the Plan is required t withhld 20% f the payment fr federal incme taxes (up t the amunt f cash and prperty received ther than emplyer stck). This means that, in rder t rll ver the entire payment in a 60-day rllver, yu must use ther funds t make up fr the 20% withheld. If yu d nt rll ver the entire amunt f the payment, the prtin nt rlled ver will be taxed and will be subject t the 10% additinal incme tax n early distributins if yu are under age 59½ (unless an exceptin applies). Hw much may I rll ver? If yu wish t d a rllver, yu may rll ver all r part f the amunt eligible fr rllver. Any payment frm the Plan is eligible fr rllver, except: Certain payments spread ver a perid f at least 10 years r ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Required minimum distributins after age 70½ (r after death) Hardship distributins ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Lans treated as deemed distributins (fr example, lans in default due t missed payments befre yur emplyment ends) The Plan administratr r the payr can tell yu what prtin f a payment is eligible fr rllver. 5
If I dn t d a rllver, will I have t pay the 10% additinal incme tax n early distributins? If yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins fr any payment frm the Plan (including amunts withheld fr incme tax) that yu d nt rll ver, unless ne f the exceptins listed belw applies. This tax is in additin t the regular incme tax n the payment nt rlled ver. The 10% additinal incme tax des nt apply t the fllwing payments frm the Plan: Payments made after yu separate frm service if yu will be at least age 55 in the year f the separatin Payments that start after yu separate frm service if paid at least annually in equal r clse t equal amunts ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Payments frm a gvernmental defined benefit pensin plan made after yu separate frm service if yu are a public safety emplyee and yu are at least age 50 in the year f the separatin Payments made due t disability Payments after yur death Payments f ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Payments made directly t the gvernment t satisfy a federal tax levy Payments made under a qualified dmestic relatins rder (QDRO) Payments up t the amunt f yur deductible medical expenses If I d a rllver t an IRA, will the 10% additinal incme tax apply t early distributins frm the IRA? If yu receive a payment frm an IRA when yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins frm the IRA, unless an exceptin applies. In general, the exceptins t the 10% additinal incme tax fr early distributins frm an IRA are the same as the exceptins listed abve fr early distributins frm a plan. Hwever, there are a few differences fr payments frm an IRA, including: There is n exceptin fr payments after separatin frm service that are made after age 55. The exceptin fr qualified dmestic relatins rders (QDROs) des nt apply (althugh a special rule applies under which, as part f a divrce r separatin agreement, a tax-free transfer may be made directly t an IRA f a spuse r frmer spuse). The exceptin fr payments made at least annually in equal r clse t equal amunts ver a specified perid applies withut regard t whether yu have had a separatin frm service. There are additinal exceptins fr (1) payments fr qualified higher educatin expenses, (2) payments up t $10,000 used in a qualified first-time hme purchase, and (3) payments after yu have received unemplyment cmpensatin fr 12 cnsecutive weeks (r wuld have been eligible t receive unemplyment cmpensatin but fr self-emplyed status). Will I we State incme taxes? This ntice des nt describe any State r lcal incme tax rules (including withhlding rules). If yur payment includes after-tax cntributins SPECIAL RULES AND OPTIONS After-tax cntributins included in a payment are nt taxed. If a payment is nly part f yur benefit, an allcable prtin f yur after tax cntributins is generally included in the payment. If yu have pre-1987 after-tax cntributins maintained in a separate accunt, a special rule may apply t determine whether the after-tax cntributins are included in a payment. Yu may rll ver t an IRA a payment that includes after-tax cntributins thrugh either a direct rllver r a 60-day rllver. Yu must keep track f the aggregate amunt f the after-tax cntributins in all f yur IRAs (in rder t determine yur taxable incme fr later payments frm the IRAs). If yu d a 60day rllver t an IRA f nly a prtin f the payment made t yu, the after-tax cntributins are treated as rlled ver last. Fr example, assume yu are receiving a cmplete distributin f yur benefit which ttals $12,000, f which $2,000 is after-tax cntributins. In this case, if yu rll ver $10,000 t an IRA in a 60-day rllver, n amunt is taxable because the $2,000 amunt nt rlled ver is treated as being aftertax cntributins. Yu may rll ver t an emplyer plan all f a payment that includes after-tax cntributins, but nly thrugh a direct rllver (and nly if the receiving plan separately accunts fr after-tax cntributins and is nt a gvernmental sectin 457(b) plan). Yu can d a 60-day rllver t an emplyer plan f part f a payment that includes after-tax cntributins, but nly up t the amunt f the payment that wuld be taxable if nt rlled ver. 6
If yu miss the 60-day rllver deadline Generally, the 60-day rllver deadline cannt be extended. Hwever, the IRS has the limited authrity t waive the deadline under certain extrardinary circumstances, such as when external events prevented yu frm cmpleting the rllver by the 60-day rllver deadline. T apply fr a waiver, yu must file a private letter ruling request with the IRS. Private letter ruling requests require the payment f a nnrefundable user fee. Fr mre infrmatin, see IRS Publicatin 590, Individual Retirement Arrangements (IRAs). If yur payment includes emplyer stck that yu d nt rll ver If yu d nt d a rllver, yu can apply a special rule t payments f emplyer stck (r ther emplyer securities) that are either attributable t after-tax cntributins r paid in a lump sum after separatin frm service (r after age 59½, disability, r the participant s death). Under the special rule, the net unrealized appreciatin n the stck will nt be taxed when distributed frm the Plan and will be taxed at capital gain rates when yu sell the stck. Net unrealized appreciatin is generally the increase in the value f emplyer stck after it was acquired by the Plan. If yu d a rllver fr a payment that includes emplyer stck (fr example, by selling the stck and rlling ver the prceeds within 60 days f the payment), the special rule relating t the distributed emplyer stck will nt apply t any subsequent payments frm the IRA r emplyer plan. The Plan administratr can tell yu the amunt f any net unrealized appreciatin. If yu have an utstanding lan that is being ffset If yu have an utstanding lan frm the Plan, yur Plan benefit may be ffset by the amunt f the lan, typically when yur emplyment ends. The lan ffset amunt is treated as a distributin t yu at the time f the ffset and will be taxed (including the 10% additinal incme tax n early distributins, unless an exceptin applies) unless yu d a 60-day rllver in the amunt f the lan ffset t an IRA r emplyer plan. If yu were brn n r befre January 1, 1936 If yu were brn n r befre January 1, 1936 and receive a lump sum distributin that yu d nt rll ver, special rules fr calculating the amunt f the tax n the payment might apply t yu. Fr mre infrmatin, see IRS Publicatin 575, Pensin and Annuity Incme. If yu rll ver yur payment t a Rth IRA If yu rll ver the payment t a Rth IRA, a special rule applies under which the amunt f the payment rlled ver (reduced by any after-tax amunts) will be taxed. Hwever, the 10% additinal incme tax n early distributins will nt apply (unless yu take the amunt rlled ver ut f the Rth IRA within 5 years, cunting frm January 1 f the year f the rllver). If yu rll ver the payment t a Rth IRA, later payments frm the Rth IRA that are qualified distributins will nt be taxed (including earnings after the rllver). A qualified distributin frm a Rth IRA is a payment made after yu are age 59½ (r after yur death r disability, r as a qualified first-time hmebuyer distributin f up t $10,000) and after yu have had a Rth IRA fr at least 5 years. In applying this 5-year rule, yu cunt frm January 1 f the year fr which yur first cntributin was made t a Rth IRA. Payments frm the Rth IRA that are nt qualified distributins will be taxed t the extent f earnings after the rllver, including the 10% additinal incme tax n early distributins (unless an exceptin applies). Yu d nt have t take required minimum distributins frm a Rth IRA during yur lifetime. Fr mre infrmatin, see IRS Publicatin 590, Individual Retirement Arrangements (IRAs). Yu can als rll ver a payment frm the Plan t a designated Rth accunt in an emplyer plan. Rllver t a designated Rth accunt in the same plan If yu rll ver the payment t a designated Rth accunt in the Plan, the amunt f the payment rlled ver (reduced by any after-tax amunts directly rlled ver) will be taxed. Hwever, the 10% additinal tax n early distributins will nt apply (unless yu take the amunt rlled ver ut f the designated Rth accunt within the 5 year perid that begins n January 1 f the year f the rllver). If yu rll ver the payment t a designated Rth accunt in the Plan, later payments frm the designated Rth accunt that are qualified distributins will nt be taxed (including earnings after the rllver). A qualified distributin frm a designated Rth accunt is a payment made bth after yu attain age 59 ½ (r after yur death r disability) and after yu have had a designated Rth accunt in the Plan fr a perid f at least 5 years. The 5-year perid described in the preceding sentence begins n January 1 f the year yur first cntributin was made t the designated Rth accunt. Hwever, if yu made a direct rllver t a designated Rth accunt in the plan f anther emplyer, the 5-year perid begins n January 1 f the year yur first cntributin was made t the designated Rth accunt in the Plan, r, if earlier, t the designated Rth accunt in the plan f the ther emplyer. Payments frm the designated Rth accunt that are nt qualified 7
distributins will be taxed t the extent allcable t earnings after the rllver, including the 10% additinal tax n early distributins (unless an exceptin applies). Once the in-plan cnversin t Rth has ccurred, it is irrevcable. If yu are nt a plan participant If yu are a surviving spuse. If yu receive a payment frm the Plan as the surviving spuse f a deceased participant, yu have the same rllver ptins that the participant wuld have had, as described elsewhere in this ntice. In additin, if yu chse t d a rllver t an IRA, yu may treat the IRA as yur wn r as an inherited IRA. An IRA yu treat as yur wn is treated like any ther IRA f yurs, s that payments made t yu befre yu are age 59½ will be subject t the 10% additinal incme tax n early distributins (unless an exceptin applies) and required minimum distributins frm yur IRA d nt have t start until after yu are age 70½. If yu treat the IRA as an inherited IRA, payments frm the IRA will nt be subject t the 10% additinal incme tax n early distributins. Hwever, if the participant had started taking required minimum distributins, yu will have t receive required minimum distributins frm the inherited IRA. If the participant had nt started taking required minimum distributins frm the Plan, yu will nt have t start receiving required minimum distributins frm the inherited IRA until the year the participant wuld have been age 70½. If yu are a surviving beneficiary ther than a spuse. If yu receive a payment frm the Plan because f the participant s death and yu are a designated beneficiary ther than a surviving spuse, the nly rllver ptin yu have is t d a direct rllver t an inherited IRA. Payments frm the inherited IRA will nt be subject t the 10% additinal incme tax n early distributins. Yu will have t receive required minimum distributins frm the inherited IRA. Payments under a qualified dmestic relatins rder. If yu are the spuse r frmer spuse f the participant wh receives a payment frm the Plan under a qualified dmestic relatins rder (QDRO), yu generally have the same ptins the participant wuld have (fr example, yu may rll ver the payment t yur wn IRA r an eligible emplyer plan that will accept it). Payments under the QDRO will nt be subject t the 10% additinal incme tax n early distributins. If yu are a nnresident alien If yu are a nnresident alien and yu d nt d a direct rllver t a U.S. IRA r U.S. emplyer plan, instead f withhlding 20%, the Plan is generally required t withhld 30% f the payment fr federal incme taxes. If the amunt withheld exceeds the amunt f tax yu we (as may happen if yu d a 60-day rllver), yu may request an incme tax refund by filing Frm 1040NR and attaching yur Frm 1042-S. See Frm W-8BEN fr claiming that yu are entitled t a reduced rate f withhlding under an incme tax treaty. Fr mre infrmatin, see als IRS Publicatin 519, U.S. Tax Guide fr Aliens, and IRS Publicatin 515, Withhlding f Tax n Nnresident Aliens and Freign Entities. Other special rules If a payment is ne in a series f payments fr less than 10 years, yur chice whether t make a direct rllver will apply t all later payments in the series (unless yu make a different chice fr later payments). If yur payments fr the year are less than $200 (nt including payments frm a designated Rth accunt in the Plan), the Plan is nt required t allw yu t d a direct rllver and is nt required t withhld fr federal incme taxes. Hwever, yu may d a 60-day rllver. Yu may have special rllver rights if yu recently served in the U.S. Armed Frces. Fr mre infrmatin, see IRS Publicatin 3, Armed Frces Tax Guide. FOR MORE INFORMATION Yu may wish t cnsult with the Plan administratr r payr, r a prfessinal tax advisr, befre taking a payment frm the Plan. Als, yu can find mre detailed infrmatin n the federal tax treatment f payments frm emplyer plans in: IRS Publicatin 575, Pensin and Annuity Incme; IRS Publicatin 590, Individual Retirement Arrangements (IRAs); and IRS Publicatin 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publicatins are available frm a lcal IRS ffice, n the web at www.irs.gv, r by calling 1-800-TAX- FORM. * * * 8