60 day rollover

I looked this up, and all I came across was rules for 2020. I have a client who has an RMD of $ 28,000. I withheld 18% for federal and 0% for the state. I was told later that my colleague forgot to tell me we should be withholding 25%. Am I am able to put the funds back via a 60-day rollover and then process it again? I wasn’t able to find any information on this.



No, you cannot do that because the entire 28,000 was an RMD, and an RMD cannot be rolled over. Another reason you could not do this is that any additional distribution done this year going to witholding would be credited by the IRS to 2022 withholding, not 2021. I suppose client could make a 1/15 estimated tax payment for the shortfall, but for that to reduce the 2020 underpayment penalty, the work intensive 2210 AI would have to be filed AND the RMD distribution would have had to be done in the final 4 months of 2020. Probably not worth these added transactions since the withholding shortfall was < 2,000.

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