How to Claim a refund for taxes withheld from dividends

[Appleby]

Client’s qualified plan account was not flagged as ‘exempt’ in error for a few months during the previous year. as a result, taxes were withheld from some dividends paid to the account. Since these amounts should be tax-deferred, how can employer reclaim the amounts that were withheld?

Account is now flagged as ‘exempt’.

Denise

[Bird]

I think you'd have to file a tax return for the trust (1041). I'm not really sure though...

[Appleby]

Thanks Bird- the only other thing I could find that seemed to provide a somewhat of a solution was to file Form 941c and Form 843. This do not specifically address such as situation, but I guess that’s because no one would anticipate such a thing occurring or it does not happen often enough for it to be addressed.

[Slider]

We've had success using Form 990-T (see page 5 of the instructions).

[Appleby]

Excellent!!

Thanks