2026

IRA Distribution Withholding

Traditional IRA distributions carry mandatory federal withholding, and updated IRS guidance now clarifies how this applies to cryptocurrency within self-directed retirement accounts. Form 1099-DA reporting now extends to crypto assets held in IRAs. This brief explains what applies to your account.

• •When does federal withholding apply to IRA distributions containing crypto-assets?
• •How is the withheld amount calculated, and can the default rate be adjusted?
• •How will distributions and holdings appear under the new 1099-DA format?
• •What should you review with a tax professional before scheduling a distribution?