DavidD66
Employee Tax Expert

Retirement tax questions

If the proceeds were paid out directly to your wife, then the retirement account custodian is required to withhold 20% for federal tax.  In order to avoid it being taxable, you wife would have had to include $189 from personal funds, along with the amount she rolled over within 60 days of receiving the distribution.  In this case, the $189 is taxable income.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"