I have transferred from a US company to a branch in home country. I'm paid through local country payroll and have no ties with US or the US branch payroll any longer.
When I requested a distribution the 401k Plan administration says I cannot withdraw while employed overseas by foreign branch of the parent company. They typically allow after separation from the company or at age of 59. I understand this rule applies to US citizens or residents temporarily working abroad.
I understand that is a misinterpretation of IRS rules as I'm not expat (American citizen living abroad) nor am I US resident, my retirement system is not US based either.
However, I cannot find any IRS text that cover my case, it typically refers only to US citizens working abroad.
Only some incidental website text speak about foreign nationals but no mention to whether foreign employment with a associate company should allow plan to hold the funds.
This website says a foreign national can stagger withdraw but also no reference to a IRS link.
https://www.blacktowerus.com/news/626-non-resident-management-of-401k-and-ira-accounts "You may also have the option of staggering your withdrawals. Non-resident aliens are allowed an annual personal exemption of $4,050. However, to qualify, this must be your only US-based income"
Is there any IRS text on this situation available?