My Form 1099-R shows Federal Tax withheld on line 4. Do I have to report this as income?

[BillM223]

The amount of Federal Tax withheld will be credited to the amount of other withholding that you have made.

However, you do not get to reduce the amount in box 1 by the amount in box 4.

For example, if Box 1 is $10,000 and box 4 is $3,000, you will receive as cash $7,000, but you will owe tax on the entire $10,000 (other things being equal). The $3,000 will be used to help pay your tax bill when it is finally calculated.

Make sense?

[shelldannelley]

I'm sorry, but I don't understand the reply I got.  Please tell me why I should not feel like I'm being taxed twice for the same thing.  This is a death benefit, if that even matters. 

[BillM223]

Box 1 is the "total distribution". This is the total amount taken out of the retirement account.

Box 2a is the "taxable amount", which is often but not always the same amount as Box 1 (and sometimes it is blank because the issuer of the 1099-R doesn't know the taxable amount).

Box 4 is the amount of Box 1 that was not sent to you, because it is being sent to the IRS to help pay your tax bill. It is not income, but you do not get to deduct it from either Box 1 or Box 2a.

Why do you feel you are being tax twice on the same thing?

Yes, a death benefit may or may not affect the taxability of the income, but my guess is that this does not affect your question.

[macuser_22]

You are not being taxed twice. 

You are taxed once on your 2020 tax return.    1099-R box 4 withholding is just estimating  the tax and  goes on line 25c on your 1040 form and offsets your overall tax liability - just like W-2 withholding.