@dhyen
Owwww.....that's pretty unusual that the entire RMD was applied to withholding.
Sometimes, a state, will not allow a person to e-file their tax return if the withholding is so large....usually set at somewhere between 20% -to50% of the total for the states that have such a limit......but that % limit is set by the states themselves. Why? Because the state wants to see the actual 1099-R form as proof that such a large withholding amount was actually done......which then requires mail-filing
Putting in a penny less in box 14 might just be what you have to do to get the form to work for correcting the supposed "error" in the software....but I don't know if the e-file for that state will eventually be blocked or not anyhow. Since many of the amounts from all your various withholdings end up getting rounded to the nearest $1 anyhow, that penny is not likely to cause any problem.
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Might be best to not take such a large % as withholding in future RMDs.....especially if you find out you have to mail-file the state forms because of that situation. Mail-filed tax returns can take a long time to get processed.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
