When I called the administrator to withdraw they told me they could not do anything about it and they withheld 20% of the total amount. ie - $1394 fed tax on $6974 (total contibution and dividends/interest). My past employer doesn't want to deal with it because they don't know what to do.
I contributed a set amount every year and it was taxed as mentioned(state, fed, local and school). My W2's never reflected my contribution until I questioned it the last year then it showed my contribution - so I was not taxed on that amount that year.
Over the course of the participation I made about $1200 from dividends/interest. I have not filed taxes on this yet since I only withdrew a month ago. I need to get this mess straightened out and figure what I need to do on my taxes. I have been taxed on the amount contributed since 1994 - minus 1 year when we noticed.
I did not have the administrator take out state tax on the withdraw since this is a mess.