Hi, I am a 38 years old Indian citizen, was on L1 in the US for 3 years & returned to India in 2007; I filed returns in the US for 2007 income in 2008. I had no US income in 2008 & 09... In 2010, I withdrew my 401K savings & tax was withheld @ 20% on that in the US. I have now been sent a form 1099-R by the 401K Management Trust Co. I have the following questions:
* I now understand that there is a 30% withhold stipulation for 401K distribution to non-residents. I had not filed any 'Departing Alien' document with the IRS or with the 401K trust (I was not aware that I had to do this) - hence the trust may not have been aware of my NR status & thus deducted only 20%.
* Does this mean that I now need to file a tax return in the US, esp. for the (possible) 10% shortfall in the withheld status? Again, there was no earning in 2010, just existing 401K was withdrawn & the tax on that was already deducted at source @ 20%.
* Does there exist any treaty between India & the US where the 401K should not be taxed at all & hence I can file to claim back the tax that was withheld in the US?
* If I need to file a tax, ***. Advice how, I no longer have a US address. Also, the last date for this was June 15th which has just passed & I did not file for an extension.

Yes you still have to file the taxes the remaining 10 percent will be taken when you file taxes that is what the 1099-r is for just file your taxes with your current address and only for what is on the 1099-r and you will be fine

File nonresident tax return. If you owe tax, you will pay interest and non-filing penalty on tax you owe. So it is better to file soon.

Txs... a few clarifications * I took full ditribution of 401K savings of $22620 & $4524 was withheld as tax @ 20%. Is it that the tax with-holding should have been @ 30% as I am now Nonresident? I read 1040NR, which said 401K income is Effectively Connected, allowing personal exemption of $3650 & directed me to a table where the tax payable post-deduction taxable income ($18970) was only $2435 (i.e 12.8%) I understand that 10% penalty ($2262) reported in line 56 of 1040NR is over & above this. I assume that I owe $173 to the IRS, as below:(Tax 2435+Penalty 2262) - (Tax withheld 4524) = 173 Am I correct? * How do I now make the payment to IRS? I understand I need to print, sign & send 1040NR to IRS Austin, Tx center, but how do I send them $173 that I owe them? I can't send them a 'cheque' as I no longer have a US Bank account: Do I send a cheque from my Indian bank? * I am late as the June 15th filing date has passed so do I owe penalities & interest? If yes, how do I calculate & pay?