State Income Tax Withholding

Van Kampen is required to withhold state income tax on certain distributions made from Van Kampen sponsored retirement accounts where State Street Bank & Trust Company serves as custodian. This affects the following Van Kampen sponsored retirement plans:

• IRAs (including Traditional, SEP, SARSEP & SIMPLE)
• Roth IRAs
• 403(b)(7) Tax Sheltered Custodial Accounts (TSAs)
• Optional Retirement Program Tax-Sheltered Custodial Accounts (ORPs)
• Profit Sharing and Money Purchase Plans (Keoghs)

Van Kampen may withhold state income tax if, at the time of your distribution:

1. your tax residence is within certain states that impose an income tax and impose mandatory withholding;
2. federal income tax is also being withheld from your distribution; AND
3. the distribution amount exceeds the state’s exclusion amount (if applicable).

Any state tax withheld will be reported for the respective withholding year on IRS Tax Form 1099-R.

For a current list of states for which Van Kampen applies state withholding, please refer to the chart below. This chart will be updated periodically.
 

States With Withholding Tax Applied

State	Effective Date	Withholding Amount	Exclusions	State's Contact Information
Arkansas	02/05/07	3% of the federal income tax withholding amount1	State income tax withholding will not occur for gross distribution amounts less than $200	www.arkansas.gov/index.php
California	02/07/05	10% of the federal income tax withholding amount	None	www.ftb.ca.gov
Delaware	11/01/04	5% of the gross distribution amount unless W-4P is received5	None	www.state.de.us/revenue/default.shtml
Iowa	12/01/04	5% of the gross distribution amount	State income tax withholding will not occur for gross distribution amounts less than $3,000	www.state.ia.us/tax
Kansas	03/08/05	5% of the gross distribution amount	State income tax withholding will not occur for gross distribution amounts less than $200	www.ksrevenue.org
Maine	12/01/04	5% of the gross distribution amount	None	www.maine.gov/revenue
Massachusetts	08/01/05	Based on Massachusetts wage tables2	None	www.dor.state.ma.us
Mississippi	10/24/05	5% of the gross distribution amount	State income tax withholding will not occur for certain distribution types3	www.dor.state.ma.us
Nebraska	03/19/07	5% of the gross distribution amount	State income tax withholding will not occur for certain types of retirement plans4	www.revenue.state.ne.us/index.html
North Carolina	03/08/05	4% of the gross distribution amount	State income tax withholding will not occur for gross distribution amounts less than $200	www.dor.state.nc.us
Oklahoma	01/10/05	5% of the gross distribution amount	None	www.oktax.state.ok.us
Oregon	01/25/05	8% of the gross distribution amount	State income tax withholding will not occur for gross distribution amounts less than $125	www.dor.state.or.us
Vermont	08/02/04	2.7% of the gross distribution amount1	State income tax withholding will not occur for gross distribution amounts less than $200	www.state.vt.us/tax
Virginia	03/29/05	4% of the gross distribution amount	State income tax withholding will not occur for certain types of retirement plans4	www.tax.virginia.gov

Van Kampen does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. It was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Federal and state tax laws are complex and constantly changing. You should always consult your own legal or tax advisor for information concerning your individual situation.

¹ Arkansas state withholding is 5 percent and Vermont is 5.4 percent of gross distribution for eligible rollover distributions subject to the mandatory 20 percent federal income tax withholding. This affects 403(b)(7) Tax Sheltered Custodial Accounts (TSAs), Profit Sharing and Money Purchase Plans (Keoghs).

² Massachusetts state withholding are based on wage tables. Unless Van Kampen receives an IRS Form W4-P (must be provided at the time of such distribution request) instructing otherwise, the withholding will default to a marital status of “single” with zero exemptions as reflected in Massachusetts' state withholding guidelines.

³ Mississippi state withholding excludes most distribution types from state withholding except return of excess and premature distributions.

⁴ IRAs are exempt from Nebraska and Virginia state withholding, including Traditional, Roth, SEP, SARSEP and SIMPLE IRAs. Therefore, Van Kampen will only apply state withholding for the state of Nebraska and Virginia on 403(b)(7) Tax Sheltered Custodial Accounts (TSAs), Optional Retirement Program Tax-Sheltered Accounts (ORPs) and Money Purchase and Profit Sharing Plans (Keoghs).

⁵ Delaware’s state withholding will default to 5% of the gross distribution amount unless Van Kampen receives an IRS Form W-4P (must be provided at the time of distribution request) instructing the withholding to be based on Delaware’s wage tables.

Tax Information Center