Is it true that if a taxpayer receives a 1099R from an IRA distribution if the withholding is more than 50% the tax can't be efiled. If so is this an IRS or Intuit Pro series requirement?

[Just-Lisa-Now-]

There may be some withholding limitations, its generally with state withholding that Ive seen.   It would be unusual for withholding to be so high and may look like a fraudulent amount or a typo mistake so EFiling may not be allowed, even if its legit.

Have you entered a 1099R and input high withholding and it tells you no Efiling is allowed?  I tried it in a 2020 dummy return, 20K 1099R with 15K in Fed withholding, I don't see any Efiling errors.

[PATAX]

Lisa is correct and I think it is an IRS requirement... I don't think ProSeries would care one way or the other.... Just my opinion...

[Just-Lisa-Now-]

Ohh, so maybe it doesnt show as an EF error, but would get rejected by IRS?

[PATAX]

I would try to e-file it first to see if it goes through... There's nothing to lose if it is rejected... But I thought I read before what you said Lisa....

[joshuabarksatlcs]

CA has a requirement for paper filing if state tax withholding on W-2 is over 50%....

The closest I could think of for IRS:

 Troubleshooting diagnostic ref. 20063- IRS requires withholding amount be less than sum

(Probably barking up the wrong tree again....  LOL)

[PATAX]

I think you are right Joshua.. Also if my memory serves me right I think there was a similar post about another state maybe Illinois months ago, same thing like you said...

[joshuabarksatlcs]

The link to the article

 Troubleshooting diagnostic ref. 20063- IRS requires withholding amount be less than sum

https://proconnect.intuit.com/community/electronic-filing/help/irs-requires-withholding-amount-be-le...

[jeffmcpa2010]

I commonly have clients which have RMD's from retirement accounts pay the full amount of tax from all sources as withholding from their RMD late in the year.

Saves from clients having to remember to make estimated payments, etc. Sometimes this does create a situation where the withholding from that one account does not look like a normal percentage.

I have not had any exceed 50% though, so I can not answer that part.

[qbteachmt]

Wow...

Business Rule F1040-071-03
Form 1040, Line 64

Error: Check the total amount of your federal withholdings on Line 64 of your 1040.

'WithholdingTaxAmt' must be less than the sum of the following:
[Line 7 'WagesSalariesAndTipsAmt' and Line 8a 'TaxableInterestAmt' and Line 9a 'OrdinaryDividendsAmt' and (Line 15a 'IRADistributionsAmt' or Line 15b 'TaxableIRAAmt') and (Line 16a 'PensionsAnnuitiesAmt' or Line 16b 'TotalTaxablePensionsAmt' ) and Line 19 'UnemploymentCompAmt' and Line 20a 'SocSecBnftAmt' and ( all 'OtherIncomeAmt' in [OtherIncomeTypeStatement] attached to Line 21 ) and ( all Schedule C (Form 1040), Line 1 'TotalGrossReceiptsAmt' ) and ( all Schedule C-EZ(Form 1040), Line 1 'TotalGrossReceiptsAmt' ) ] unless one of the following is true: (1) Line 13 'CapitalGainLossAmt' has a non-zero value; (2) Line 14 'OtherGainLossAmt' has a non-zero value; (3) Line 17 'RentalRealEstateIncomeLossAmt' has a non-zero value; (4) Line 18 'NetFarmProfitLossAmt' has a non-zero value; (5) Combat Pay has been excluded from wages.

[joshuabarksatlcs]

Yep, a mouthful, but nothing about 50%...