Yes. You can often reduce the risk of an unexpected tax bill by estimating your total federal tax for the year and then either asking the retirement payer to withhold more from the required minimum distribution (RMD) or making estimated tax payments. There is no withholding percentage that fits every recipient: the correct amount depends on all of your income, deductions, credits, filing status and prior-year tax. An RMD is generally taxable, but it is not subject to the mandatory 20% withholding rule that applies to eligible rollover distributions.
Why an RMD can leave you underwithheld
An RMD is a distribution you are required to take under federal retirement rules. The Internal Revenue Service generally includes it in taxable income, except for any portion representing basis that was already taxed or a distribution that qualifies for tax-free treatment, such as a qualified distribution from a designated Roth account. The amount withheld from the payment is only a prepayment of that eventual tax; it is not a final tax rate.
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The common mistake is to treat the RMD in isolation. Your federal liability is based on your full-year taxable income. Wages, pensions, interest, dividends, capital gains, a spouse’s income, business income and other retirement withdrawals can all change the marginal rate and the credits available. A percentage that looks reasonable against the RMD alone can therefore be too low for the household’s final return.
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The 10% default for a nonperiodic payment
For 2026, IRS Form W-4R generally uses a 10% federal withholding default for a nonperiodic payment. The form generally permits a recipient to request a different rate from 0% through 100%. An RMD is commonly processed as a nonperiodic distribution, but the custodian or plan payer controls how its election process works. Ask which form or online instruction it uses, the deadline for submitting a change and the first payment to which the change will apply.
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The 10% default is an administrative starting point, not an IRS recommendation for your circumstances. Form W-4R warns that too little withholding can produce tax due when you file and may produce a penalty unless you make timely estimated-tax payments.
Why the mandatory 20% rule does not automatically apply
The mandatory 20% federal withholding rule is associated with eligible rollover distributions. IRS Publication 505 identifies distributions required by federal law, including RMDs, as distributions that are not eligible rollover distributions for that rule. In practical terms, an RMD does not automatically have 20% withheld merely because it comes from a retirement account. You may be able to elect a higher voluntary rate, but that is different from a mandatory 20% requirement.
Estimate the tax you actually need to prepay
Use a whole-year estimate rather than multiplying the RMD by a guessed percentage. The following sequence keeps the estimate tied to the facts that determine your return.
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- Project every source of income for the tax year. Include the RMD, other retirement distributions, wages, pensions, interest, dividends, capital gains and any other expected taxable income. Use realistic amounts for income that is uneven or seasonal.
- Account for filing status, deductions and credits. Your filing status and expected deductions affect taxable income; credits can reduce the final tax. Include a spouse’s figures when filing jointly.
- Subtract withholding already scheduled. Add federal withholding from paychecks, pensions and other distributions. Treat an RMD withholding election as one component of the year’s prepayments, not as the tax calculation itself.
- Compare the projected balance with the safe-harbor amounts. Publication 505 describes a general required annual payment based on the smaller of 90% of expected current-year tax or 100% of prior-year tax. A higher prior-year percentage generally applies when prior-year adjusted gross income exceeded $150,000, or $75,000 for married taxpayers filing separately.
- Check the filing-year outcome. The IRS also says a taxpayer may avoid the estimated-tax penalty when the filed return shows less than $1,000 owed. This exception concerns the penalty calculation; it does not mean the RMD itself is tax-free or that no payment is due.
The safe-harbor percentages and income thresholds are legal rules that can change. Confirm the amounts in the Publication 505 version for the tax year you are filing. If your income is complex, compare the estimate with the IRS worksheets or obtain individualized tax advice rather than choosing a rate from the RMD amount alone.
Option 1: Ask the payer to withhold more from the RMD
If your projected tax is higher than the amount currently scheduled, contact the IRA custodian, retirement-plan administrator or other payer before the distribution is released. Ask whether the payment is treated as nonperiodic for Form W-4R purposes and how to elect a higher percentage. A request can generally be anywhere from 0% to 100% for the 2026 federal election range, subject to the payer’s processing system.
- Obtain the payer’s current withholding form or online election screen.
- Enter the requested federal percentage and verify that it applies to the specific RMD, not only to future recurring payments.
- Confirm the submission deadline, the date the election becomes effective and whether a separate election is required for another account or payer.
- Keep the confirmation and the gross distribution, federal withholding and net payment amounts shown on the statement.
- Re-run your whole-year estimate after the election. A late-year increase may fix the total amount but may not, by itself, resolve an earlier installment-period shortfall under every penalty calculation method.
Increasing withholding reduces the cash that reaches you from the RMD immediately, but it is operationally simple and generally receives favorable timing treatment in the IRS estimated-tax penalty calculation. The amount withheld is credited on your tax return even if the payment is made near the end of the year.
Option 2: Make estimated tax payments
Instead of reducing the RMD payment, you can keep more of the distribution and send payments directly to the IRS. Publication 505 describes withholding and estimated tax as pay-as-you-go methods. Estimated payments are tied to installment periods, so you must track the dates and amounts yourself.
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| Installment | General 2026 due date | What to verify |
|---|---|---|
| First | April 15, 2026 | Whether a weekend or legal holiday moves the deadline |
| Second | June 15, 2026 | The amount still required after earlier payments and withholding |
| Third | September 15, 2026 | Any updated income, gains or additional distributions |
| Fourth | January 15, 2027 | Whether the date is adjusted by a weekend or legal holiday |
Use the IRS payment instructions and the current Form 1040-ES materials for the mechanics and vouchers. Recalculate when a large capital gain, bonus, sale or additional retirement distribution changes the projection. Missing an early installment can matter even if the total paid by filing time is sufficient.
Withholding and estimated payments compared
| Consideration | Higher RMD withholding | Estimated payments |
|---|---|---|
| Cash flow | Less cash arrives with the RMD. | More of the distribution remains available until you send a payment. |
| Administration | One election with the payer, subject to its cutoff and processing rules. | You must calculate, schedule and document each installment. |
| Timing for penalty calculations | Withholding is generally treated as paid across payment periods; Publication 505 also explains an actual-withholding method for uneven payments. | Payments generally count in the installment period in which they are made. |
| Flexibility | You can request a percentage, but the payer may restrict how and when changes are made. | You can adjust a later installment as your income estimate changes. |
| Main risk | A late election may not correct an earlier-period issue, and an arbitrary percentage may still be too low. | Forgetting a due date or sending too little can create an underpayment penalty. |
You can use both methods. For example, you might elect a higher percentage on the RMD and make an estimated payment if the combined prepayments still fall short of the amount indicated by your projection or safe harbor.
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How RMD timing differs from tax-payment timing
The deadline for taking an RMD and the deadline for paying tax are separate. A first RMD can generally be postponed until April 1 of the year after the year in which it is required. If you postpone it, you generally must also take the next year’s RMD by December 31 of that same year. That can put two taxable distributions into one tax year and materially change the withholding or estimated-payment calculation.
Later annual RMDs are generally due by December 31. Do not wait for the RMD deadline to begin planning your tax prepayments. A distribution made late in the year may be fully taxable in that year, while estimated-tax installments may have been due months earlier.
Illustrative decisions (not a personalized rate)
Only a modest RMD and little other income
If the RMD is the main taxable income and your existing pension or paycheck withholding already covers most of the projected liability, the 10% default might be more than, less than or close to the needed amount. The deciding comparison is your total projected tax minus all withholding, not the RMD’s size by itself.
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Large RMD plus wages, pension and investment income
When several income sources overlap, a default percentage on the RMD can understate the household’s combined tax. Add the projected wages, pension, interest, dividends and gains, then compare all scheduled withholding with the current-year and prior-year safe-harbor tests. A higher RMD election may be simpler than adding another quarterly payment, but check the payer’s effective date.
Uneven income or a late-year capital gain
If income arrives unevenly, the annual safe harbor may not tell the whole timing story. Publication 505 describes an actual-withholding method for taxpayers who need to match payments to when withholding occurred. Keep dated records of each withholding and estimated payment and use the applicable IRS worksheet rather than assuming a December payment cures every earlier shortfall.
Common mistakes and how to correct them
- Assuming 20% is mandatory. That rule concerns eligible rollover distributions; an RMD is generally excluded from it. Ask the payer what voluntary percentage is available instead.
- Using the default as a recommendation. The 2026 10% default is a withholding setting, not a calculation of your final tax.
- Estimating from the RMD alone. Rebuild the projection with every income source, deduction, credit and existing withholding.
- Ignoring a postponed first RMD. Model the possibility of two RMDs in the following tax year.
- Waiting until filing season. A balance due on the return may be accompanied by an estimated-tax penalty. Review the projection during the year and use the applicable installment schedule.
- Assuming federal and state rules match. The federal W-4R rules do not establish your state’s withholding requirements. Ask the payer how state withholding is handled.
- Overlooking payer procedures. Custodians differ in cutoffs, forms and whether an election covers one payment or recurring payments. Obtain written confirmation.
A practical checklist before the next RMD
- List every expected taxable-income source for the year, including whether a first RMD was deferred.
- Estimate filing status, deductions, credits and total federal tax.
- Add withholding already taken or scheduled from all payers.
- Check the 90%-of-current-year and 100% (or applicable 110%)-of-prior-year safe-harbor tests in the current Publication 505, plus the $1,000 balance-due rule.
- Choose a higher RMD withholding election, estimated payments, or a combination.
- Confirm the payer’s effective date and retain the confirmation.
- Recalculate after a major income change and before the next installment date.
Because this is a federal framework rather than a personalized calculation, taxpayers with a first-year RMD, substantial capital gains, multiple retirement accounts or significant income from other sources should verify the numbers against the current IRS worksheets or consult a qualified tax professional. State and local withholding and each custodian’s processing rules require separate confirmation.
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