De minimus payout

[pmacduff]

as per usual this time of year I'm getting a very clouded mind!  anyway - if the plan states that participant consent is not required for distributions under $200 (those get forced out) is it still required that the Plan Administrator provide the "special tax notice" to termed participants under $200 before processing the distribution? 

[Mike Preston]

Yup.

[ETA Consulting LLC]

Of course, you're giving the special tax notice.  This notice informs them, amount other things, of their rights to roll the distribution over.  You do not, however, need to give them a distribution election.  Instead, you may simply pay them out the cash (without any withholding) and issue the special tax notice with the distribution.

Good Luck!

[Calavera]

Check the plan document. Generally a plan document specifically has it in to avoid the rollover. So you would pay it as cash with 20% withholding (no notice, no election, no rollover).

[My 2 cents]

I understood that the 20% withholding is not required when the distribution is below $200.

Under $200 - probably appropriate to pay with no election and no withholding.  Probably a good idea to include the tax notice.

[BG5150]

...and under $10 no 1099-R needed!

[Mike Preston]

Ignore Calavera's response.  He is confused between a direct rollover (which an under $200 distributable amount is unlikely to have available) and a regular rollover (where the participant rolls over the amount received within 60 days of  receipt).

[Calavera]

21 hours ago, Mike Preston said:

Ignore Calavera's response.  He is confused

Indeed he was