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K-1 for taxable welfare benefit trust?


Guest hapa123

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Guest hapa123

A temp agency contracts with an insurance company to provide health and welfare benefits to its temp employees. The agency maintains a welfare benefit trust to hold the amounts withheld from employees' paychecks for purposes of paying insurance premiums. The earnings of this trust (if any) are taxable. Must the benefitting employees each be issued a K-1 statement reflecting the trust's activity?

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A couple of years ago I called the IRS to ask them this question. I spoke to three people. The third directed me back to the first.

If you find an answer, let me know. If you don't file them, I doubt that the IRS will care.

Why don't you avoid the issue by liquidating the trust (assuming that the premiums are pisd via a cafeteria plan)?

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