Incorrect RMD Taken
I have a 457 plan and an IRA. I mistakenly combined the RMDs from both accounts and took it from the 457 plan. I would like to do a rollover of some of the money (the excess over the 457 plan’s RMD) into the IRA and then take the RMD from the IRA. The money taken from the 457 plan had 20% tax withheld. I don’t know how to account for the tax paid when I do the rollover. The 457 plan will not let me return the excess money to that account.
Permalink Submitted by Alan - IRA critic on Mon, 2018-01-29 23:05
There is no mandatory withholding for an RMD, so the 457 should only have withheld on the amount in excess of the 457 RMD. In any event, to complete the rollover of the excess amount you will have to come up with that money from another source and get the excess amount into an IRA within 60 days of the distribution. Can you come up with that money before you take out your IRA RMD? Basically, the withholding can be considered as an advance tax payment for 2018, and you can recover it sooner then spring 2019 if you reduce other tax payments to the IRS this year.