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required minimum distribution - how is this reported on the tax return - the gross and tax wh - this was returned to the account

06271900
Level 1

form 8915- E     reported the gross distribution, but what happens to the tax that was withheld?

help - help

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Just-Lisa-Now-
Level 15
Level 15
withholdings are used in 2020, they cannot be spread to the other years, be sure your clients understand they may end up under withheld for 2021 and 2022 due to this extra income.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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06271900
Level 1

used form 8915-E to return the required minimum distribution, but have no clue as to what happens to the federal income tax withheld.    Will show as a refund on the 1040 and then show reduction on the 5498?

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Just-Lisa-Now-
Level 15
Level 15

Oh, Im sorry, I missed RMD when you mentioned the 8915E.

For and RMD payback, use the Rollover section in the 1099R worksheet, you dont use the 8915E...thats for Covid distributions that you want to spread over 3 years.

Did they return the entire amount (adding their own funds for the w/h?)  or only the net?

You still use the Rollover section, just be sure you only rollover exactly what was recontributed.  The withholding will be considered a payment and potentially refunded on the return.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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06271900
Level 1

thank you!

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qbteachmt
Level 15

"will the tax on the required minimum distribution that was returned to the account show up on the form 5498"

No one "returns" the tax, once it is paid to Fed/State. It's just part of any prepayment, withholding or estimated payment for that tax year.

The only way you avoid that is the taxpayer makes up the difference in their redeposit. That's why you examine if the redeposit (rollover) of an RMD (which had to be made by the end of August) is Gross or Net. If Net, that amount is a partial taxable distribution.

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06271900
Level 1

will the tax on the required minimum distribution that was returned to the account show up on the form 5498?

 

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