Tax Reporting: Withholding on IRA Distributions in Connection with Rollover

We are required to apply 20% withholding tax from IRA distributions, unless your IRA rollover is sent directly account to account. Box 4 of the 1099-R reports any withheld taxes. Please note that for any tax deferred account rollover on which taxes have been withheld, the full amount (including the taxes) must be re-deposited into a tax-deferred account within 60 days for the transaction to be income tax free.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

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