What to do with an extra two cents?

[Guest Jensen]

This is the first year that I am doing the 5500 for this client. A separated employee took a full (or so they thought!) distribution last year for which she received a 1099R, and was included as a 'code D' on the 2004 SSA. For whatever reason, the distribution was short by two cents. It appears that the Plan just sort of wrote off this two cents -- is that okay? It would seem silly to pay the employee the $.02, do another 1099R, amend the SSA, show her as a participant receiving a benefit, etc., but I don't want to have any trouble down the line. Is it okay for me to just ignore this oversight in payment?

Any care to share their two cents on this topic

[JanetM]

I would just write the .02 off. The cost in administration, check fees, 1099 and such stuff far exceeds the .02.

[Appleby]

…also, distributions for less than $10 need not be reported on a 1099-R ( Source : Instructions for filing 1099-R)