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2 and ½ month distribution period for Excess Contributions


Guest RMV

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Posted

A calendar year plan, liquidates excess contributions from participants accounts and the Trust 3/13/00, the checks are cut 3/15/00 with a post date of 3/16/00 and mailed 3/16/00. Which year would the participants be taxed 1999 or 2000? How is the 2 and ½ months interpreted? Could the transfer of assets and the correction to the Plan prior to 3/15 meet the 2 and ½ deadline?

Guest GregSelf
Posted

What's the reason for the 2-day gap period between separation from the trust and cutting the check? I've been given various "opinions" re: this question. The most consistent of which is to use the check date. I guess I assumed that would correspond to the date of liquidation. I haven't seen a situation where there was a gap like you describe.

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Posted

The intent was to have the checks issued by 3/15. Basically, it was a mistake due to a data entry error in miscoding the distribution code on the check requests, which were forwarded to the Trustee, and thus the Trustee was not made aware of the dead line.

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