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I am a citizen of a European country who worked a couple of years in the USA, then moved back to Europe. I withdrew my 401(a) pension last year as a lump sum and need to know how this is taxable.

Questions:

(1) Am I correct that the federal tax is standard withholding plus 10%?

(2) Under what conditions would I/would I not need to file a state tax return? I do not live in any US state when I withdrew the pension lump sum.

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(1) Am I correct that the federal tax is standard withholding plus 10%?

Probably. You will probably need to fill-in form 1040NR. The number you come up with after completing the form will be the tax you owe.

(2) Under what conditions would I/would I not need to file a state tax return?

Most states allow you to be released from your residency status if you can prove your residency what somewhere else for more than six months of the year. Some states however make ending your residency very difficult: California, New Mexico, South Carolina, Virginia. You must prove to them that you will not return to those states.

I do not live in any US state when I withdrew the pension lump sum.

It depends on the State rules, and whether they had released you from the filing requirement when you made the withdrawal.

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  • 1080NR? Do you mean 1040NR?
    – mkennedy
    Apr 6, 2018 at 17:11
  • @mkennedy - yes. corrected.
    – xirt
    Apr 6, 2018 at 17:12
  • 1040-NR yes! Well I was working in CA, and I can reasonably prove I have no current connection to the state. So would one need to tell them that you are resident elsewhere or just not file the state tax return and explain if they chase you up on it?
    – MichaelT
    Apr 7, 2018 at 21:35
  • I would suggest working with them. You could find bad things happening to you otherwise.
    – xirt
    Apr 8, 2018 at 4:11
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    Will do. Meanwhile this is helpful: ftb.ca.gov/forms/misc/1100.pdf which states that "California does not tax the IRA distributions, qualified pension, profit sharing, and stock bonus plans of a nonresident. California taxes compensation received by a nonresident for performance of services on a source basis. If the services are performed in California, the compensation income is sourced to California"
    – MichaelT
    Apr 9, 2018 at 20:28

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