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Old 08-23-2017, 08:52 PM   #21
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You may be confusing withholding with what you ultimately pay in tax. They will withhold 20% for federal taxes but when you do your return you actual taxes are less, then you'll get a refund for the difference so you net cost will be the 20% net of the refund.
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Old 08-23-2017, 09:11 PM   #22
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Thank you- I believe you clarified that correctly!
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Old 08-24-2017, 12:32 AM   #23
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Quote:
Originally Posted by RE2Boys View Post
I suspect that since the compensation was earned in CA, it will be considered CA sourced income and fully taxable by CA regardless of where you ultimately live. And reportable and taxable in your resident state at the time you receive the funds. Most states will grant a credit for taxes paid to another state (in this case, CA).


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CA is very aggressive about recovering taxes relating to $$ earned in CA, regardless of where the person getting the compensation lives now.
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Old 08-24-2017, 11:05 PM   #24
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The big benefit to withdrawing 457 funds is you can do it early withdrawal penalty free at any age. Yes -the withholding tax is 20 % fed + 2% of the fed amount if you are a CA resident. Withholding tax is mandatory but gets sorted out the following April 15th. You would not pay the 2% if you were a NV or FL or TX resident at time of withdrawal. The big plus to these funds is no age requirement-you just have to be separated from employer to get the money. For someone retiring (FIRE'ing early and young), this is a nice way to get money.
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