Special tax notice regarding plan payments

1 Special tax notice regarding plan payments You are receiving this notice because all or a portion of a payment you are receiving from your employer's retirement plan (the Plan ) is eligible to be rolled over to an IRA or an employer plan. This notice is intended to help you decide if you should roll over these funds (or payments ), and is provided by TIAA on behalf of your Plan administrator. Part I of this notice describes the rollover rules that apply to payments from the Plan that are not from a W . designated Roth account (a type of account in some employer plans that is subject to Special tax rules). Part II of this notice describes the rollover rules that apply to payments from the Plan that are from a W . designated Roth account. Part II only applies to your distribution if the Plan has a designated Roth account. If your Plan has a designated Roth account, the Plan administrator or TIAA will tell you the amount that is being paid from each account.

2 The rules of the IRA or employer plan that holds the rollover Part I payments not from a will determine your investment options, fees and rights to designated Roth account payment from the IRA or employer plan (for example, IRAs Your rollover options are not subject to spousal consent rules, and IRAs may not provide loans). Further, the amount rolled over will become Rules that apply to most payments from a plan are described subject to the tax rules that apply to the IRA or employer plan. in the General Information About Rollovers section. Special rules that only apply in certain circumstances are described How do I do a rollover? in the Special Rules and Options section. There are two ways to roll over funds. You can choose either a direct rollover or a 60-day rollover. General information about rollovers If you choose a direct rollover, the Plan will make the payment How can a rollover affect my taxes? directly to your IRA or an employer plan.

3 You should contact You will be taxed on a payment from the Plan if you do not roll the IRA sponsor or the administrator of the employer plan for it over. If you are under age 59 and do not do a rollover, you information on how to request a direct rollover. will also have to pay a 10% additional income tax on early distributions (generally, distributions made before age 59 ), If you do not choose a direct rollover, you may still roll over unless an exception applies. However, if you choose to roll funds by making a deposit into an IRA or eligible employer over these payments , you will not be taxed until you receive plan that will accept it. Generally, you will have 60 days after payments later, and the 10% additional income tax will not you receive the payment to make the deposit. If you do not apply if those payments are made after you are age 59 (or choose (or opt for) a direct rollover, the Plan is required to if an exception to the 10% additional income tax applies).

4 Withhold 20% of the payment for federal income taxes. This means that, in order to roll over the entire payment in a 60- What types of retirement accounts and plans may accept my day rollover, you must use other funds to make up for the rollover? 20% withheld. If you do not roll over the entire amount of the You may roll over the payment to either an IRA (an individual payment, the portion not rolled over will be taxed and will be retirement account or individual retirement annuity) or an subject to the 10% additional income tax on early distributions employer plan (a tax- qualified plan, section 403(b) plan, or if you are under age 59 (unless an exception applies). governmental section 457(b) plan) that will accept the rollover. Special tax notice regarding plan payments How much may I roll over? the separation;. If you choose a rollover, you may roll over all or part of the W payments made due to disability;. amount eligible for rollover. Any payment from the Plan is W payments after your death.

5 Eligible for rollover, except: W Corrective distributions of contributions that exceed tax W Certain payments spread over a period of at least 10 law limitations;. years or over your life or life expectancy (or the joint lives W Cost of life insurance paid by the Plan;. or joint life expectancies of you and your beneficiary);. W payments made directly to the government to satisfy a W Required minimum distributions after age 70 (if you federal tax levy;. were born before July 1, 1949) or age 72 (if you were W payments made under a qualified domestic relations born after June 30, 1949) (or after death);. order (QDRO);. W Hardship distributions;. W payments of up to $5,000 made to you from a defined W Corrective distributions of contributions that exceed tax contribution plan if the payment is a qualified birth or law limitations;. adoption distribution. W Loans treated as deemed distributions (for example, W payments up to the amount of your deductible medical loans in default due to missed payments before your expenses (without regard to whether you itemize employment ends).)

6 Deductions for the taxable year);. W Cost of life insurance paid by the Plan; and W Certain payments made while you are on active duty if W payments of certain automatic enrollment contributions you were a member of a reserve component called to that you request to withdraw within 90 days of your duty after September 11, 2001 for more than 179 days;. first contribution; and W payments of certain automatic enrollment contributions W Distributions of certain premiums for health and accident that you request to withdraw within 90 days of your first insurance. contribution; and The Plan administrator or the payor can tell you what portion W payments excepted from the additional income tax by of a payment is eligible for rollover. federal legislation relating to certain emergencies and disasters. If I choose not to roll over, will I have to pay the 10%. additional income tax on early distributions? If I roll over funds (or payments ) to an IRA, will the 10%.

7 If you are under age 59 , you will have to pay the 10% additional income tax apply to early distributions from the IRA? additional income tax on early distributions for any payment If you receive a payment from an IRA when you are under age from the Plan (including amounts withheld for income tax) 59 , you will have to pay the 10% additional income tax on that you do not roll over, unless one of the exceptions listed early distributions on the part of the distribution that you must below applies. This tax applies to the part of the distribution include in income, unless an exception applies. In general, that you must include in income and is in addition to the the exceptions to the 10% additional income tax for early regular income tax on the payment not rolled over. distributions from an IRA are the same as the exceptions The 10% additional income tax does not apply to the listed above for early distributions from a plan. However, there following payments from the Plan: are a few differences for payments from an IRA, including: W payments made after you separate from service if you W The exception for payments made after you separate will be at least age 55 in the year of the separation; from service if you will be at least age 55 in the year W payments that start after you separate from service if of the separation (or age 50 for qualified public safety paid at least annually in equal or close to equal amounts employees) does not apply.

8 Over your life or life expectancy (or the joint lives or joint W The exception for qualified domestic relations orders life expectancies of you and your beneficiary); (QDROs) does not apply (although a Special rule W payments from a governmental plan made after you applies under which, as part of a divorce or separation separate from service if you are a qualified public safety agreement, a tax-free transfer may be made directly to an employee and you will be at least age 50 in the year of IRA of a spouse or former spouse); and A9164_402(f) notice 03/21 2. Special tax notice regarding plan payments W The exception for payments made at least annually in Similarly, if you do a 60-day rollover to an IRA of only equal or nearly equal amounts over a specified period a portion of a payment made to you, the portion rolled applies without regard to whether you have had a over consists first of the amount that would be taxable separation from service. if not rolled over.

9 For example, assume you are receiving Additional exceptions apply for payments from an IRA, a distribution of $12,000, of which $2,000 is after-tax including: contributions, and no part of the distribution is directly rolled over. In this case, if you roll over $10,000 to an IRA that W payments for qualified higher education expenses; is not a Roth IRA in a 60-day rollover, no amount is taxable W payments up to $10,000 used in a qualified first-time because the $2,000 amount not rolled over is treated as home purchase; and being after-tax contributions. W payments for health insurance premiums after you You may roll over to an employer plan all of a payment that have received unemployment compensation for 12 includes after-tax contributions, but only through a direct consecutive weeks (or would have been eligible to rollover (and only if the receiving plan separately accounts receive unemployment compensation but for self- for after-tax contributions and is not a governmental employed status).)

10 Section 457(b) plan). You can make a 60-day rollover to an Will I owe state income taxes? employer plan of part of a payment that includes after-tax contributions, but only up to the amount of the payment that This notice does not address any state or local income tax would be taxable if not rolled over. rules (including withholding rules). If you miss the 60-day rollover deadline Special rules and options Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the If your payment includes after-tax contributions deadline under certain extraordinary circumstances, such After-tax contributions included in a payment are not taxed. as when external events prevented you from completing If you receive a partial payment of your total benefit an the rollover by the 60-day rollover deadline. Under certain allocable portion of your after-tax contributions is included circumstances, you may claim eligibility for a waiver of the in the payment, so you cannot take a payment of only 60-day rollover deadline by making a written self-certification.