IRS using new versions of W-4P, W-4R for 2023 tax year

On January 3, 2022, the IRS posted a revised Form W-4P, Withholding Certificate for Pension or Annuity Payments, and new Form W-4R, Withholding Certificate for Non-periodic Payments and Eligible Rollover Distributions. The use of the revised forms was optional for the 2022 tax year, but will become mandatory for the 2023 tax year.

Current benefit recipients are not impacted by these tax changes. A benefit recipient who is already receiving benefits as of Dec. 31, 2022 will continue to receive the payment unchanged going forward unless a new W-4P is submitted. A new form is not required to be submitted.

The W-4P rules will apply to new benefit recipients or to anyone who wants to change their federal withholdings and submits a new W-4P to OP&F. In addition, the new form no longer allows payees to adjust the withholding amount using the number of allowances.

Prior to revision, payees used Form W-4P to tell payers the correct amount of federal income tax to withhold from taxable payments for periodic and non-periodic payments from pensions, profit-sharing, stock bonus, annuity, certain deferred compensation plans, individual retirement arrangements (IRAs) and commercial annuities, and eligible rollover distributions.

As revised, Form W-4P is used for taxable periodic pension and annuity payments, and new Form W-4R is used for taxable non-periodic payments and eligible rollover distributions. Basically, the old W-4P was split into two forms.

W-4P Instructions (periodic pension and annuity payments)

W-4R Instructions (non-periodic distributions)

Please contact a tax professional for additional assistance completing these forms.

Form W-4P

Form W-4R

Posted 1/19/2023