Withholding deposits

[nancy]

Does anyone have a simplified method of depositing withholding payments where the check is written on a brokerage account and the bank is not local? The local bank will not accept the deposit.

[Lynn Campbell]

I have asked the brokerage firm to make the check payable to the Employer, who then deposits the check and issues one payable to the Bank. This seems to be the only way to get the Bank to accept the check.

[Guest Bill]

Maybe I'm not understanding what your saying here, but I don't like the idea of paying from the plan to the Employer. Doesn't the Trust have a checking account that the money could flow through?

[Lynn Campbell]

This is a client who had all assets at one brokerage firm - no trust checking account. I agree this is not the ideal tactic - to transfer funds to the Employer - but seems justifiable in light of the need to meet withholding rules, and can easily be explained.

[Guest Bill]

What I've done in the past is have the institution write two checks, one to the IRS for the amount of withholding and one to the participant - then give those to the employer to deposit and distribute. Keeps from money going to the employer. The employer shouldn't be doing the withholding, anyhow, should be done under the Trust's tax ID number.

[Lynn Campbell]

First of all, my employer did deposit using the trust ID and coupon for the Plan, not the Employer. Second, how did your Employer use a check payable to the IRS when the deposit was made at the Bank? Thanks for input.

[nancy]

I agree. The bank will not accept a check made payable to the IRS with a coupon deposit.

We have several client who have one brokerage account and have check writing priveleges on the account. However, most brokerage accounts are not located in our city and therefore are not drawn on a local bank. I even have one where Bank One is the bank but because it is not Bank One of Louisiana, we have to mail the deposits to Ohio.