Guest MFuentes Posted February 5, 2000 Posted February 5, 2000 The Treas. Regs. basically state that if an excess contribution is returned within the first 2 1/2 months of the plan year following the plan year in which the excess occurred that it's taxable in the earlier year. The plan year end is 12/31/99. The ADP test fails and returns are distributed. The 1099R for the distribution won't be sent out until Jan 2001. How does the participant report the additional income on their 1999 tax forms?
LCARUSI Posted February 5, 2000 Posted February 5, 2000 Participant reports the additional income on 1999 tax return even though he/she does not have 1099-R. The 1099-R which will be issued in Jan-2001 will have a code indicating it is taxable income for a prior year, i.e. 1999. [This message has been edited by LCARUSI (edited 02-05-2000).]
Guest MFuentes Posted February 5, 2000 Posted February 5, 2000 Thanks for your reply. I still have a question about the nuts and bolts of how it's reported to the IRS in the year taxable -- in this case 1999 -- aside from just putting it in the appropriate box on the 1040. Doesn't there have to be something attached to the 1999 tax forms as an explanation of why the box is filled in? Am I being overly concerned about something that's not a real issue?
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