dmertz
Level 15

Retirement tax questions

Yes.  Regardless of why taxes were withheld, if you did not substitute other funds to complete the rollover of the entire distribution to the new account within 60 days, the amount withheld for taxes remains a taxable distribution.

Any amount withheld for taxes is applied on your tax return as a credit toward your overall tax liability.  Any amount of your overall withholding and other tax payments that is in excess of your overall tax liability will be refunded.  (That's what a tax refund is.)