Citi Benefits Handbook
Withholding on Installment Payments, Annuities and Minimum Required Distributions
If you receive your account balance in installments for 10 years or more or in installments payable over your life expectancy (or the joint life expectancies of you and your designated beneficiary), you can elect whether to have federal income tax withheld from your payments by contacting the Plan. This election is also available for payments under annuity options to the extent available under the Plan.
If you do not make any election, federal income tax will be withheld automatically as if the payments were wages and you were married and claiming three withholding allowances. For example, this generally means that tax will be withheld if a monthly distribution is at least $1,680 per month.
Regardless of the amount of federal income tax withheld from the installment payments, you will be responsible for paying any taxes associated with the taxable portion of the installments including any amount that exceeds the amount withheld.