Tax Withholding for Customer Premium Refunds
Athene refunds premium to our customers (via check to their address of record) for a variety of reasons including free looks, cancelled applications, refunds prior to issue, and residual premiums received after issue.
If the funds were received via 1035 exchange or trustee-to-trustee transfer, we’re obligated to withhold state tax in accordance with state laws. To assist you when helping clients make state tax withholding elections, we’ve put together a summary of our interpretation of the tax withholding requirements of various states.
State Tax Withholding – Required
The states/jurisdictions listed below do not allow customers to opt out of withholding. Athene will withhold at the default mandatory state tax.
- CT, DC
State Tax Withholding – May opt out with state specific form
Although most states require state tax withholding if federal tax is withheld, customers in the states listed below, may opt out. To opt out, a state specific form is required for the customer’s resident state.
- AR, CA, IA, ME, MI, MN, NC, OK and VA
State Tax Withholding – May opt out
Although most states require state tax withholding if federal tax is withheld, customers in the states listed below may opt out.
- DE, KS, MA, NE, OR and VT
State Tax Withholding – Distribution from Qualified Plans (pension, 403(b), 401(k) etc.)
State tax withholding is mandatory in the states listed below if the funds originated from a qualified plan.
- AR, DE, IA, KS, ME, MD, MA, MI, NE, NC, OR, VT and VA
State tax withholding — Optional
State tax withholding — Optional
- AL, CO, GA, HI, ID, IL, IN, KY, LA, MD, MS, MO, MT, NJ, NM, NY, ND, OH, PA, RI, SC, UT, WV and WI
Federal Tax Withholding
The IRS requires default tax withholding of 10% unless the individual elects no withholding or a different federal tax withholding. To elect a different federal tax withholding other than 0 or 10%, a completed W-4R is required.
Information regarding state tax withholding is based on our understanding of current state tax laws, which is subject to change and differing interpretations. This information should not be relied on as tax or legal advice and cannot be used by any taxpayer for the purposes of avoiding penalties that may be imposed by any governmental tax authority. We recommend that taxpayers consult with their professional tax and legal advisors for applicability to their personal circumstances. Please refer to the customer’s state/jurisdiction tax authority website for further information. |
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