Distribution to U.S. Citizen living abroad

We have a participant who lives abroad but is a U.S. citizen. The participant filled out the required W-9 form for the distribution. How would this distribution be taxed? Would it be subject to 20% federal tax withholding and no state tax (even if the participant previously lived in a state that had state tax)?

Thank you.

The 20% federal is correct.  I almost never feel qualified to speak to state tax withholding issues. 

If the check is going to be delivered outside the US to a US citizen then the mandatory Federal withholding rate is 30% (see the instructions to Form W-4P).

11 minutes ago, Flyboyjohn said:

If the check is going to be delivered outside the US to a US citizen then the mandatory Federal withholding rate is 30% (see the instructions to Form W-4P).

The only reference I see to a 30% rate in the instructions are here:

In the absence of a tax treaty exemption, nonresident aliens, nonresident alien beneficiaries, and foreign estates generally are subject to a 30% federal withholding tax under section 1441 on the taxable portion of a periodic or nonperiodic pension or annuity payment that is from U.S. sources. However, most tax treaties provide that private pensions and annuities are exempt from withholding and tax.

Since he is talking about a US citizen this person isn't any of those types of people.  Did I miss something in your mind? 

ESOP Guy check the paragraph right above the paragraph you're quoting

OOPS, ESOP Guy you are correct, normal 20% withholding applies to US citizens, my bad.

What about state taxes? I'm assuming that since the participant is living in another country, state taxes won't apply (even if that participant previously lived in a state that had state tax). Would you agree?

Correct.  The state tax is with regard to the state currently domiciled, which is not in the U.S., and there's no "state" tax requirement for withholding outside of a U.S. province.

If this is an eligible rollover distribution (and it sounds like it is), the withholding rate is 20%. Of course, it could be rolled over, even by a U.S. person currently residing outside U.S., and then no withholding. But the 20% rate applies if an ERD. See 3405(c). And if it was not an ERD, the withholding rate would be determined using the information supplied by the U.S. citizen on Form W-4P. The paragraph in instructions you are referring to, Flyboyjohn is only saying that a U.S. citizen receiving a period payment outside U.S. cannot make the "no withholding" election using W-4P.