FDAP withholding (30%)

Default 30% US tax withholding on Fixed, Determinable, Annual or Periodic income paid to a non-resident alien.

Default rate is 30%, reducible by tax treaty between the US and your country of birth. India and China have treaty provisions but the application to lump-sum 401(k) distributions is contested. CRITICAL: cashing out a 401(k) as an NRA hits 30% FDAP + 10% early-withdrawal penalty if under 59½. On a $200K balance, that's $80K destroyed for nothing. Always pair this with a CPA familiar with NRA rules.

Related terms

Substantial Presence Test (SPT)
IRS Pub 519 test that determines whether you're a US tax resident or non-resident alien for the year.
401(k) rollover (vs cash-out)
Move your 401(k) to an IRA tax-deferred — vs. cashing out, which destroys 30-40% as an NRA.

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This is an information-only tool, not legal advice. You are responsible for your decisions. When in doubt, consult an immigration attorney.