Traditional to Roth Conversion Terms

Terms:

I certify that the following are true and correct:  

1. I understand that my conversion election is irrevocable and that I am eligible to make this conversion.

2. I understand that assets ineligible for conversion include any required minimum distribution, any part of a series of substantially equal periodic payments, or any corrective distribution of certain SEP or SIMPLE IRA plan excess contributions. The Custodian has recommended that I consult with my tax advisor or the IRS before completing this transaction to make certain that this transaction qualifies as a valid conversion and is appropriate in my individual circumstances. I understand that these transactions are reported to the IRS and I acknowledge that I am responsible for keeping records and information pertaining to any ROTH IRA conversion as directed by the IRS. I hereby release the Custodian from any damages on account of the failure of this transaction to qualify as a valid conversion. 

Federal Tax Withholding

If no percentage is selected, NDTCO is required to withhold at a default 10% withholding rate from the taxable amount no exceptions.  

You may choose to have no federal income tax withheld by entering “-0- “in the withholding section.  Generally, you are not permitted to elect to have income tax withheld at a rate of less than 10% (including -0-) on any payments to be delivered outside the United States.  Please note that if you choose to have too little tax withheld, you could owe tax when you file your tax return and may owe a penalty unless you make a timely of estimated tax.  If too much tax is withheld, you will generally be due a refund when you file your tax return.  Your withholding choice (or an election not to have withholding) will generally apply to any future payment from the same IRA or plan.  Please submit another Distribution and Notice of Withholding form if you want to change your choice. 

State Tax Withholding

Residents of IA, MA, MD, ME, NE, OK and VT: If federal tax is withheld, state tax withholding is mandatory. NDTCO will automatically withhold the minimum required by your state unless you specify a higher amount below.  

Residents of AR, CA, DE, KS, MI, NC, NM (voluntary), and OR: State income tax withholding is required when federal withholding is elected or taken by default.  IA your state’s W-4P form is required any time state income tax withholding is elected (including when federal withholding occurs).  If you are required to submit your states W-4P Withholding form, it can be found on your state’s government website, not the IRS website.   

Residents of MS and CT: If federal tax is withheld, state tax withholding is mandatory if your distribution is subject to the federal early withholding penalty. NDTCO will automatically withhold the minimum required by your state unless you specify a higher amount below.    

Residents of all other states: If you aren’t a resident of a state listed above, state tax withholding isn’t available for you at this time.