Definition
Distributions from a retirement account that are payable on demand , i.e. they can typically be requested in any amount at anytime.
The tax code defines nonperiodic distributions as “any designated distribution which is not a periodic payment”.
Referring Cite
IRC § 3405(e)(3), IRS Form W4-P
Additional Helpful Information
- The withholding rate for a nonperiodic payment is 10%, providing the amount is not rollover eligible. IRC §3405(b)(1). If the amount is rollover-eligible, and is not processed as a direct rollover, the withholding is 20%
