ThomasM125
Employee Tax Expert

Retirement tax questions

It sounds like the dividend ended up in the rollover IRA, so it is not taxable. The withholding is taxable since it was paid to the IRS on your behalf. If you can make a deductible IRA contribution, you can do that for the amount of the tax withheld, and that would cancel out the tax amount applicable to the withholding.

 

You will need to report the withholding as a taxable pension distribution on your tax return. But you can deduct the taxes withheld from your tax for the year.

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