Jump to content

New 1099R Distribution code for reporting Loan Offsets


Recommended Posts

I'm looking for confirmation on the new 2018 1099-R distribution code 'M' for reporting loan offsets from qualified retirement plans:

  1. If a participant receives a cash distribution that includes a loan offset, we now issue two 1099Rs: one for the actual cash received that would reflect withholding on that portion (distribution code of 1 (assuming non-Roth, under age 55), and a second one to report the loan offset with any applicable tax w/h applicable on that portion (same assumptions, distribution code M1).  Prior to this new code coming out, we reported this scenario all on one 1099R.  Is my understanding correct? 
  2. If the cash was from a Roth account and the outstanding loan balance was also from the Roth account,  we don't include code M since only 2 codes are allowed.  Roth loan offsets would continue to use codes B1 using the age example above.  Correct?
  3. Do we have to go back and correct  2018 1099Rs on loan offsets processed prior to this new code coming out?  

Thanks!

Link to comment
Share on other sites

1 - Yes

2 - Yes

3 - How did you get 2018 1099Rs before the instructions were out?  Nevermind.  Yes, just issue new 1099Rs and tell the Recipient to toss the first one they received, if you have not filed the 1099R with the IRS.  If you did file the 1099Rs with the IRS, you must file a corrected 1099R.

Kristina

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...