Updated October 17, 2026. Quick answer: Box 4 is the federal income tax your payer withheld from the distribution. The form tells you to “Include this amount on your income tax return as tax withheld.” The rest of this page quotes the payer instructions on how the amount is set for different kinds of payment.
Retirement forms read line by line: Form W-4P Step 1, Form W-4P Step 3 and Form W-4P Step 4.
What box 4 shows
On the form, box 4 is captioned “Federal income tax withheld”. The recipient instructions on the back of the form say “Shows federal income tax withheld.” and then tell you what to do with it: “Include this amount on your income tax return as tax withheld.”
Related amounts are in box 1, covered on the box 1 page, and box 2a, covered on the box 2a page. The payer’s own instructions use the same plain wording: “Enter any federal income tax withheld.” The rest of this page quotes the payer instructions on how that figure is set.
Changing your withholding: Form W-4P and Form W-4R
The recipient instructions give you a way to change the number on future payments: “Generally, if you receive payments that aren’t eligible rollover distributions, you can change your withholding or elect not to have income tax withheld by giving the payer Form W-4P or Form W-4R, as applicable.” Each form is described on its own page: Form W-4P and Form W-4R.
The payer-side instructions say this for periodic payments: “The recipient may request additional withholding on Form W-4P or claim exemption from withholding.” The passage for nonperiodic distributions says: “The recipient may request additional withholding on Form W-4R or claim exemption from withholding.” The instructions for periodic payments also say: “If a recipient does not submit a Form W-4P, withhold by treating the recipient as single with no adjustments.”
How the payer decides what to withhold
The payer instructions begin with this step: “To determine your withholding requirements for any designated distribution under section 3405, you must first determine whether the distribution is an eligible rollover distribution.” From there the rules split, as the table shows.
| Kind of payment | What the payer is told |
|---|---|
| Eligible rollover distribution paid to you | “you must withhold 20% of the part that is paid to the recipient and includible in gross income.” |
| Direct rollover | “If an eligible rollover distribution is paid directly to an eligible retirement plan in a direct rollover, do not withhold federal income tax.” |
| Periodic payments that are not eligible rollover distributions | “withhold on the taxable part as though the periodic payments were wages, based on the recipient’s Form W-4P.” |
| Nonperiodic distributions that are not eligible rollover distributions | “Withhold 10% of the taxable part of a nonperiodic distribution that is not an eligible rollover distribution.” |
The instruction for everything that is not an eligible rollover distribution reads: “If the distribution is not an eligible rollover distribution, the rules for periodic payments or nonperiodic distributions apply.” A lump-sum case is covered on the 20 percent withholding on a pension lump sum page.
Rollovers: when box 4 is blank or partial
For a direct rollover, the instruction is “do not withhold federal income tax.” The IRS’s own worked example of a direct rollover to a Roth IRA lists the payer entries, including “Box 4, no entry;”. Code G is described on the code G page.
For a payout that is not entirely a direct rollover, the instruction is worded this way: “If any part of an eligible rollover distribution is not a direct rollover, you must withhold 20% of the part that is paid to the recipient and includible in gross income.” It continues: “The recipient cannot claim exemption from the 20% withholding but may ask to have additional amounts withheld on Form W-4P”.
IRAs follow different rules
On IRAs, the instructions say “For purposes of withholding, distributions from any IRA are not eligible rollover distributions.” and “The 20% withholding does not apply to distributions from any IRA, but withholding does apply to IRAs under the rules for periodic payments and nonperiodic distributions.”
Withholding is not the early-withdrawal tax
On the additional tax for early distributions, the payer instructions say: “Even though you may be using Code 1 in box 7 to designate an early distribution subject to the 10% additional tax specified in section 72(q), (t), or (v), you are not required to withhold that tax.” For the additional tax itself, see the form described on the Form 5329 page, and for the situations that can avoid it, see the early withdrawal penalty exceptions page.
Limits on the amount withheld
The payer instructions say “The amount withheld cannot be more than the sum of the cash and the FMV of property (excluding employer securities) received in the distribution.” They also say: “If a distribution consists solely of employer securities and cash ($200 or less) in lieu of fractional shares, no withholding is required.” If your payout included employer stock, the related box is described on the box 6 page.
A worked example from the IRS: a Roth account payout
The payer instructions include an example for a nonqualified payout from a designated Roth account. “Participant A received a nonqualified distribution of $5,000 from the participant’s designated Roth account.” The payer entries included: “Box 4, $60 ($300 x 20% (0.20) as the withholding on the earnings portion of the distribution;” The example for a direct rollover to a Roth IRA shows “Box 4, no entry;”. Box 5 also appears in that example and is covered on the box 5 page.
Backup withholding does not apply here
The payer instructions say: “Backup withholding does not apply.” Withholding boxes on other 1099 forms are covered on the 1099-NEC and 1099-MISC box 4 page and the 1099-DIV box 4 page.
A page on what to do about a figure that looks wrong is the page on what to do when a 1099-R is wrong.
Edition and box numbers
This page reads the 2025 edition of Form 1099-R and its recipient instructions, together with the 2025 Instructions for Forms 1099-R and 5498 that are written for the payer. That is the edition for tax year 2025. The 2026 edition was the one irs.gov served as current on 2026-10-17, and the two editions were compared. Box 4 keeps the same number and the same caption in both editions.
The recipient paragraph for box 4 reads the same in both editions: “Shows federal income tax withheld.” The payer instructions also read the same apart from punctuation, the way tip notes are labeled and one cross-reference. The early-distribution sentence differs: the 2026 edition says “using code 1 in box 7b” where the 2025 edition said “using Code 1 in box 7”.
Check the tax year printed on the form you received. The full box-by-box list is on Form 1099-R boxes explained.
Common mistakes
- Treating box 4 as the early-withdrawal tax. The payer instructions say “you are not required to withhold that tax.”
- Assuming an IRA payout must have 20% withheld. The instructions say “The 20% withholding does not apply to distributions from any IRA”.
- Leaving box 4 off the return because a direct rollover showed nothing. The recipient instruction is “Include this amount on your income tax return as tax withheld.”
Related: Form W-4P, Form W-4R, 20 percent withholding on a pension lump sum, Form 5329, and 1099-R box 7 codes.
Sources
- Form 1099-R (2025) with Instructions for Recipient: IRS archived PDF (irs.gov)
- Form 1099-R (2026) with Instructions for Recipient: https://www.irs.gov/pub/irs-pdf/f1099r.pdf
- 2025 Instructions for Forms 1099-R and 5498: IRS archived PDF (irs.gov)
- 2026 Instructions for Forms 1099-R and 5498: https://www.irs.gov/pub/irs-pdf/i1099r.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.