Tax Type
Withholding Taxes
Description
Individual retirement account
Topic
Corporate Distributions and Adjustments
Withholding of Tax
Date Issued
03-25-1982
March 25, 1982
Re: Request for Ruling: Withholding Tax
Contributing by Employer on Behalf of Employees to Individual
Retirement Account
Dear ******************
Reference is made to your January 21, 1982 letter requesting a ruling relative to state income tax withholding.
FACTS
Your client, a corporate lawyer, is considering offering to its employees a payroll deduction plan by which amounts deducted from employees' salaries would be deposited into an "individual retirement account" as defined in Internal Revenue Code § 408. The issue is whether such deductions (contributions) are subject to state withholding.
DETERMINATION
To the extent that such deductions (contributions) are deposited into an individual retirement account as defined in Internal Revenue Code § 408 and are not wages for federal withholding tax purposes as defined in Treasury Regulation § 31.3401(a) (12)-1(d), such deductions would not be subject to state withholding tax.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner