I have an additional question related to this. Once the Hacienda 20% withholding has been taken from the 401K distribution, can the taxable funds be rolled over into US-based IRA if the benefit plan is qualified under Internal Revenue Cods section 401(a)? I was told that once the 20% required withholding has been withheld by Hacienda, if taxable funds are rolled over to a US 401K, no further tax payments are required to be made to Puerto Rico and no additional Puerto Rico income tax filing is required. Thank you.
