1099-R and a 60-day return of the funds

[Blinky the 3-eyed Fish]

A client takes a distribution but then returns the funds to the plan (including the tax withholding) within 60-days to avoid it being a taxable distribution. I am not quite sure how the 1099-R should report the distribution. To compound things, the money wasn't returned until January 2010.

Has anyone researched this?

[Belgarath]

The plan reports it normally as with any other distribution on the 1099-R. If the client subsequently rolls this over, whether back into the same plan or not, the client must account for this on their 1040.

[Bird]

I'm pretty sure you would treat it as two separate events - a taxable distribution, code 1 or 7, and then...well, plans don't report rollovers in, so I guess that participant will just have to be prepared to some splainin'. Serves 'em right for making you do the extra work involved with a distribution!

[PensionPro]

See "How to Report" on page 28 of Publication 575. Reporting the 60-day rollover is the individual's responsibility, not the plan's as the other posters noted.

[david rigby]

Is this really a rollover? Does the plan permit the participant to "return" the funds?

Just asking.