Huh?   It might be taxable and then you get credit later for all your withholding.  Can you explain what you did?  What other source did you have withholding?  What code is on the 1099R box 7.  

I want to withdraw $20,000 from previous employer retirement plan.  They are holding 20% for taxes. So I'm getting a check to put in bank for $16,000. Within 60 days I'm putting it somewhere else that I haven't decided yet.  So when I send the $16,000 to the new place is it a completed transfer or do I have to add another $4000 from somewhere else to not be taxable on everything?  If I can only send $16,000 because the old plan is holding my taxes, does it blow up the transfer?

Yes you have to add the 4,000 back in from your own money.  Or the withholding will become a taxable distribution.  Make sure you put it in a Traditional IRA account not a ROTH.

If you don't have a temporary need for the $16,000, you can avoid the mandatory 20% tax withholding by determining where you will be moving the finds and request that the 401(k) make a direct rollover there of the entire $20,000.  The plan is required to allow you to request a direct rollover.