@lmd2281 wrote:
@DoninGA Doesn't that essentially make us pay taxes on it twice though?
No. You had the taxes withheld reported on the 2020 tax return which should have given you a large increase for the 2020 federal tax refund since only 1/3 of the distribution was reported on your 2020 tax return as taxable income.
Ideally you would have saved 2/3 of that 2020 refund and used that for any increase in taxes on the 2021 and 2022 due to the 1/3 of the 2020 distribution being added as taxable income on the 2021 and 2022 tax return.
