401K withholding rate for Canadian resident

[egres]

Hello,
I am a Canadian resident with a 401K from previous employment in the US. I tried to cash out on my 401K, but stopped when I was assessed 30% withholding by the plan administrator. My expectation was 15% withholding for a Canadian resident. After contacting the plan administrator, I received the following message:

The treaty rates for Canada are: 15% - Installment with a valid W8BEN. 30 % - Lump sum with or without a W8BEN since this is the mandatory treaty rate. As of Feb 2019, we received an updated IRS publication from the Trust, that states that withholding for the Canada should be 30%. So, your payment, once approved, should have that amount withheld, even with the W8BEN form.

So I am wondering if there was some change I am not aware of, or if I am missing something. Thank you for the help

[nelsona]

Only "periodic" payments are entitled to the 15% withholding rate, as the company explained. So your lump sum should be withheld 20% (or 30% if under 59.5 yrs old)

This is only withholding. At year end you can and should file a 1040NR and report the income on page 1 and get the true tax rate, and a big refund. Not ideal, but that is the correct interpretation of the treaty.

[egres]

Ok, thanks much