Lauren3333

Thanks for your comments. If the key phrase is "the Plan is not required to allow you to do a direct rollover" does that mean that plans that provide for an automatic IRA rollover for non-responding participants who have balances over the distribution fee provide for a direct rollover? Ex: participant's account balance is $175, distribution fee is $30. The participant is informed in writing that if they don't return the distribution form their account balance will be rolled over to an IRA at X institution. However, if a participant returns the distribution form, they can do a 60-day rollover but not a direct rollover. Does the plan provide for direct rollovers?

Under what circumstances are practitioners having participants complete Form W-4R for lump sum distributions of balances under $200. Prior to 2023, based on the wording in the Special Tax Notice, the plans we administer did not withhold on lump sum distributions under $200. If the participant wanted federal income tax withheld, they would need to elect the withholding percentage on the distribution form. Is 20% withholding (or more) now the only option? Does Form W-4R not have to be provided because the plan is not required to withhold- even though it is an eligible rollover distribution, just not one that a direct rollover option is provided.