Guidance for Employers and Employees when Participants don’t cash Distribution Checks

Document Excerpt

(1) Individual A’s failure to cash the distribution check she received in 2019 does not permit her to exclude the amount of the designated distribution from her gross income in that year under § 402(a).

(2) Individual A’s failure to cash the distribution check she received does not alter Employer M’s obligations with respect to withholding under § 3405.

(3) Individual A’s failure to cash the distribution check she received does not alter Employer M’s obligations with respect to reporting under § 6047(d).

The Department of the Treasury and the Internal Revenue Service continue to analyze issues that arise in other situations involving uncashed checks from eligible retirement plans described in § 402(c)(8)(B), including situations involving missing individuals with benefits under those plans.

Link

https://www.irs.gov/pub/irs-drop/rr-19-19.pdf

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