Get Taxation 230 Form

If you were older than 59-1/2 before you received a lump sum from a qualified employee retirement plan, you may have some other options that can reduce your tax bill. To use any of these special treatments, you must complete IRS Form 4972, Tax on Lump-Sum Distributions, and attach it to your tax return.

Use the following lump-sum withholding rates to deduct income tax: 10% (5% for Quebec) on amounts up to and including $5,000. 20% (10% for Quebec) on amounts over $5,000 up to and including $15,000. 30% (15% for Quebec) on amounts over $15,000.

The organization or person who paid you the lump-sum payment must complete Form T1198 for you. The form requires them to break down how much of the lump-sum relates to each year. They will also need to include your personal information, including your Social Insurance Number (SIN).

Use Schedule G-1 with Form 540, California Resident Income Tax Return; Form 540NR, California Nonresident or Part-Year Resident Income Tax Return; or Form 541, California Fiduciary Income Tax Return, to: Choose the 5.5% capital gain method by completing Part II.

Box 110 - Lump-sum payments accrued to December 31, 1971. Box 158 - Lump-sum payments that you cannot transfer that are not reported elsewhere. Box 180 - Lump-sum payments from a deferred profit-sharing plan (DPSP) that you cannot transfer. Box 190 - Lump-sum payments from an unregistered plan.

T1198s are issued to individuals who received a pay equity payment of $3,000 or more (excluding interest); if you received more than $3,000 total, but less than $3,000 excluding interest, you will not receive a T1198.