Hello,

I have a question on how the reporting works on tax form 1099_R. A client’s tax advisor was interpreting box 16 as the amount of state income tax withheld from the retirement distribution and therefore, they were requesting a corrected 1099R. I disagreed with the client’s tax advisor so going back to them is not an option. In this particular case, box 16 had the same value as box 1 and box 2a, while box 14 (state withholding) indicated $0. Both box 4 (fed withholding) and box 14, indicated the correct withholdings per the client’s activity record. It is my understanding that the completion of box 16 is optional, and if filled in, it indicates to what the extent the amount shown in box 1 is taxable by the state. Box 16 does not indicate state withholding. I believe that is the correct interpretation. Would you agree?

Thank you.