Level 15

Retirement tax questions

From the instructions for Form 1041 line 24e:

"Except for backup withholding (as explained below), withheld income tax can't be passed through to beneficiaries on either Schedule K-1 or Form 1041-T."

(Back-up withholding is withholding required by the IRS, generally as a result of a history of past underpayment of tax:  <a rel="nofollow" target="_blank" href=""></a>)

The estate would have to obtain a refund of excess withholding and distribute it to the beneficiaries.