Schedule R filing required?

[stephen]

Are you required to file a schedule R for a profit sharing plan with no in-kind distributions?

[Archimage]

It depends on who the payor is. If you use the EIN of the employer then you don't have to file. However, if someone else is used then you would have to file.

[Bird]

Archimage, could you clarify?

The instructions say that one of the conditions for not filing is "No benefits...were paid during the plan year other than by the plan sponsor or plan administrator."

IMO, the plan, or plan and trust, is always a separate entity and the sponsor never pays benefits. I think it is possible to use the employer ID for REPORTing, but I don't think that's the same as PAYing.

In any event, we always have a separate ID number for the plan and trust and file an R when benefits are paid, using that number or the payee's number (e.g. ins. co. or mutual fund co.) if applicable.

[Archimage]

You need to read the rest of the instructions. The next line reads: "This condition i n ot met if benefits were paid by the trust or any othe payor(s) which are reportable on Form 1099-R."

[Bird]

Archimage - yes, I have read that part but it's not relevant to my question.

The instructions say that an R is not required if no benefits were paid other than BY the sponsor or administrator. Are you saying that REPORTING under the sponsor ID is equivalent to the employer PAYING the benefits? It's just that I thought this was applicable to other types of plans, e.g nonqualified plans where the 'er pays benefits directly.

I could be wrong; I'm just trying to understand this better.

[doombuggy]

At my old employer (TPA), we filed a sch. R for everyone. At my new employer, we do like Archimage suggests in his first post.

[stephen]

Bird,

It is my understanding that if you make cash distributions under the employer's EIN number that you would not have to file a schedule R.

However, if the distributions are paid using any other EIN (e.g. a trust ID number or another payor such as a mutual fund company or a bank) then the schedule R must be filed.

stephen

[Archimage]

You made a good point so I went back and looked at a few of my 5500 tax guides to see what they said. They agreed that if a profit sharing plan used the employer's EIN and makes distributions in cash, a sch R is not needed whether or not a plan is qualified or non-qualified.

[Bird]

Thanks all for the feedback. The phrasing still seems a bit odd to me, but as we always have and use a separate trust ID I guess it will never be an issue for us.