1099R forms

[pmacduff]

Plan has individual accounts with a large recordkeeper (401k and safe harbor) and a pooled, Trustee directed employer profit share investment.

TPA prepares 1099-R forms for the client for any distribution from the pooled Trustee directed PS accounts.

In majority of termination (or retirement) payouts the participant takes the 401k piece at the time of termination and the profit share piece is paid out after the end of the plan year following termination; both per the plan provisions.  However in rare cases the participant may be taking the PS portion first.  Question is - in these cases should the 1099-R form from the pooled accts NOT have the "total distribution" boxed checked?  Does it matter?

Perhaps am overthinking this but it seems to be that if the 401(k) portion remains in the Plan, even briefly, it is not a total distribution until those funds are paid.

Not a fan of these types of plans!

UPDATE:  For anyone else wondering - here are the form instructions:

"Box 2b. Total Distribution
Enter an “X” in this box only if the payment shown in box 1 is a total distribution. A total distribution is one or more distributions within 1 tax year in which the entire balance of the account is distributed. If periodic or installment payments are made, mark this box in the year the final payment is made."

So as long as they both occur in the same tax year I can mark the total box.

 

[C. B. Zeller]

I agree, with one modification:

1 hour ago, pmacduff said:

So as long as they both occur in the same plan tax year I can mark the total box.

Chances are the plan year and tax year are the same anyway.

[pmacduff]

Thank you C.B. - it is a calendar year plan -  I should have worded more carefully!

I've edited the OP