Excess Deferral after 4/15

[fiona1]

Does anyone know how many 1099-R's are issued if an excess deferral refund is distributed after 4/15?

Using the example below from the ERISA Outline book, the excess ($325) is taxable in both 2012 and 2013. The earnings ($45) are taxable in 2013.

I'm wondering if there would be one 1099 for 325 with a distribution code of P, and another 1099 for 370 with a distribution code of 8. Or, would there just be one 1099 and if so, for how much?

Example. JoAnne has excess deferrals for 2012 in the amount of $325. The plan does not distribute the excess amount by April 15, 2013. JoAnne receives a distribution of $370 on June 1, 2013, which represents the amount of the excess deferrals ($325) plus allocable income ($45). The following tax consequences apply to JoAnne.

(1) For 2012 (i.e., the deferral year), JoAnne must include $325 in gross income, which represents the amount of her elective deferrals for that year that exceeded the income exclusion limit under IRC §402(g)(1).

(2) For 2013 (i.e., the distribution year), JoAnne must include $370 in gross income, which is the total distribution made to her, even though $325 of that amount was also included in her 2012 income.

[Tom Poje]

my understanding of how the rules work:

if things were done timely, there would have been 2 1099Rs

one coded P (taxable 1 year ago) - person was suppose to put the excess deferral on their tax form even though they won't actually receive the 1099R until a year after the fact

a second 1099 coded 8 for the gains taxable in 2013.

once you are after the fact, its only 1 1099R for the full amount, taxable in the year of distribution. this doesn't mean the person shouldn't have paid taxes as well in the actual year of excess distibution, thus resulting in double taxation.

I imagine the same software the IRS uses for the form 5500s is used, so eventually the system will look at the W-2 for 2012 and determine the person had excess deferrals and generate a form letter in 3 or 4 years indicating the problem.

if the excess deferrals occurred because of two unrelated plans then you probably don't even have a distributable event, for most likely neither plan accepted deferrals in excess of the limit. you wouldn't even have a distribution until the person terminates and at that point in time the person is taxed the second time.

[fiona1]

Thanks Tom...