Does Drake generate a worksheet that calculates the pension or annuity allowance?
Yes, the W4P screen is used to produce Form W-4P, Withholding Certificate for Pension and Annuity Payments in view mode of the return.
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Form W-4P is used to calculate the correct amount of federal income tax to withhold from payments. Form W-4P is for U.S. citizens or resident aliens, or their estates that are recipients of pensions, annuities (including commercial annuities), and certain other deferred compensation. Form W-4P is not valid unless signed by the taxpayer, and does not file with the return.
Form W-4P may also be used if the taxpayer chooses to:
- Not have any federal income tax withheld from the payment (except for eligible rollover distributions or payments to U.S. citizens delivered outside the United States or its possessions); or
- Have an additional amount of tax withheld
The W4P screen is available on the Other Forms tab, or by typing W4P in the selector field and pressing the Enter key on the keyboard.
See Publication 505 for more information on completion of Form W-4P, tax withholding, and estimated taxes.