Q. An individual has been receiving the required minimum distribution (RMD) amount each year. This year, he requests $25,000 in addition to the RMD. Is the $25,000 an eligible rollover distribution subject to 20% mandatory withholding?
Rev. 07/21/05, E-mail Alert 2005-14, Revised 10/10/08. E-mail Alert 2008-13

A. RMD amounts are not eligible rollover distributions. Therefore, the 20% mandatory withholding requirement is not applicable. However, random distributions in excess of the RMD, such as the $25,000 in this case, are eligible for rollover to an IRA or an eligible retirement plan and, therefore, are subject to the 20% mandatory withholding.