Pammie57 Posted December 13, 2016 Posted December 13, 2016 We have mostly plans on platforms where distributions and withholding are taken care of for the client. However, I have one client who is with a broker, who does none of that for him. He recently had a terminated participant request a cash distribution. I instructed them to withhold the 20% - now he is asking me what he does with it. Am I correct in telling him to go to a bank, get a deposit coupon and mark 945 on the coupon and make the deposit (much like a 941 deposit). Thanks for input.
RatherBeGolfing Posted December 13, 2016 Posted December 13, 2016 We have mostly plans on platforms where distributions and withholding are taken care of for the client. However, I have one client who is with a broker, who does none of that for him. He recently had a terminated participant request a cash distribution. I instructed them to withhold the 20% - now he is asking me what he does with it. Am I correct in telling him to go to a bank, get a deposit coupon and mark 945 on the coupon and make the deposit (much like a 941 deposit). Thanks for input. Personally, I would just sign up as a batch provider with EFTPS, get a "Reporting Agent Authorization" (form 8655) from the client, and make the deposit for them. After that, you would be prepared to handle the issue if it ever came up again. It is free and simple to do. I have never had a broker who was actually allowed to do a tax deposit if it wasn't done through their corporate channels. That could simply be because of the brokers I work with, but I have always been told that they are not allowed to assume that liability. As for deposit coupons, can you even do that anymore? I thought they were phased out after the electronic deposit requirement and after a certain point they would no longer accept coupons... hr for me 1
K2retire Posted December 13, 2016 Posted December 13, 2016 I have a similar issue. According to the IRS, they only accept payment electronically. My client tried to sign up for EFTPS using his plan's EIN, but apparently it has been de-activated by the IRS due to inactivity. Paychex does his payroll withholding using the employer's EIN. Is it possible to get more than one PIN associated with the same EIN? The client has no idea what the one Paychex uses might be.
RatherBeGolfing Posted December 13, 2016 Posted December 13, 2016 I have a similar issue. According to the IRS, they only accept payment electronically. My client tried to sign up for EFTPS using his plan's EIN, but apparently it has been de-activated by the IRS due to inactivity. Paychex does his payroll withholding using the employer's EIN. Is it possible to get more than one PIN associated with the same EIN? The client has no idea what the one Paychex uses might be. I don't think you can get more than one PIN. And they are probably not using a PIN for the plan EIN since it is de-activated, right?
Bird Posted December 13, 2016 Posted December 13, 2016 We use EFTPS for clients who don't have a platform. I wouldn't say it's that easy, at least as far as getting started; I mean, I would really hate to have to go through that for just one client (but I don't think there is a choice). To be clear, we are handling it for our clients by running checks through our own (separate) bank account. I do not want to think about a client trying to do this themselves...! As far as the inactive EIN, you can get them re-activated. There's a special fax number...but it's easier to just get a new one. You have to lie and say you never got one, and also can't use an effective date more than 10 years or so ago for the plan start date. Ed Snyder
austin3515 Posted December 13, 2016 Posted December 13, 2016 I have a very very very simple solution: PenChecks. Call them. All of this will go away. So easy...http://www.penchecks.com/ Austin Powers, CPA, QPA, ERPA
K2retire Posted December 13, 2016 Posted December 13, 2016 I have a very very very simple solution: PenChecks. Call them. All of this will go away. So easy... http://www.penchecks.com/ It is my understanding that PenChecks will only do this if they handle the distribution. In this case the participant already has the rest of the money.
K2retire Posted December 13, 2016 Posted December 13, 2016 I have a similar issue. According to the IRS, they only accept payment electronically. My client tried to sign up for EFTPS using his plan's EIN, but apparently it has been de-activated by the IRS due to inactivity. Paychex does his payroll withholding using the employer's EIN. Is it possible to get more than one PIN associated with the same EIN? The client has no idea what the one Paychex uses might be. I don't think you can get more than one PIN. And they are probably not using a PIN for the plan EIN since it is de-activated, right? I was thinking for the company EIN, not the plan's. The client doesn't know what the PIN is because Paychex is making the deposits for payroll. Paychex is not inclined to do this for them or tell them the PIN that they are using.
austin3515 Posted December 13, 2016 Posted December 13, 2016 PenChecks of course is different then PayChex. And PenChecks can do JUST the whithhodling deposit. They will also do the 1099. If you have pooled or FBO distibutions and you're struggling with all of this, this will "change your life." The process is: Have the investment holder send a check to PenChecks and reference your clients Plan Number (which you would have from setting them up on PenChecks). Enter the payee's elections on the website and the payment amount. PenChecks will match up the distribution you entered with the funds received and sends out the check to the participant, remits the withholding and does the 1099, all for $35. And I do not work on commission! K2retire 1 Austin Powers, CPA, QPA, ERPA
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