Jump to content

1099s


PS

Recommended Posts

Hi,

I assisted with one of the plan termination and the sponsor as reached out asking for 1099s to the people that switched employers but stayed with us.  I'm not really what this means, why would we send a 1099S? I believe 1099s was more with self-employment however could anyone help me understand when a 1099s is sent? 

Link to comment
Share on other sites

Very quick answer - distributions (including rollovers) from a plan are reported on a 1099. I suggest you go to the IRS website, and read the instructions for a 1099 - there are many different situations and reporting codes, and these boards are the wrong place to try to get detailed answers to a laundry list of all the potential situations.

Once you have read and digested the instructions, then if you have a specific question on a situation, these boards are very helpful.

Good luck! 

Link to comment
Share on other sites

2 hours ago, PS said:

Hi,

I assisted with one of the plan termination and the sponsor as reached out asking for 1099s to the people that switched employers but stayed with us.  I'm not really what this means, why would we send a 1099S? I believe 1099s was more with self-employment however could anyone help me understand when a 1099s is sent? 

What was your role in this - "assisted with?"

Ed Snyder

Link to comment
Share on other sites

There are many different types of payments that are reported on "a 1099." You can read about some of them here: https://www.irs.gov/businesses/small-businesses-self-employed/a-guide-to-information-returns

Distributions from retirement plans and IRAs are reported on 1099-R. Payments to independent contractors could be reported on 1099-MISC or 1099-NEC.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Link to comment
Share on other sites

I believe the sponsor is requesting you to send out Form 1099Rs and they did not specify the "R" and were only using the generic plural of 1099, i.e. 1099s (lower case). The Form 1099S reports Proceeds From Real Estate Transactions, so you definitely do not use this form.

Before you jump into any kind of tax reporting, you should clarify your role and the facts and circumstances surrounding the "plan termination".  Your brief statement suggests that there are multiple employers involved and possibly other plans associated with these employers.  The statement also suggests that there was some sort of business transaction that occurred.  If any of the suggestions are factual, it is possible (and maybe likely) that the options made available to some of the participants in the terminating plan were not permissible.

Trying to help by sending out Forms 1099S now could make a problem far worse.

Please explain more about what happened:

On 2/6/2024 at 5:34 AM, PS said:

assisted with one of the plan termination

Was there one or more plan terminations? and Bird asked, what was your role?

On 2/6/2024 at 5:34 AM, PS said:

the sponsor as reached out

Was this the sponsor of the plan that terminated or some sponsor of another plan?

On 2/6/2024 at 5:34 AM, PS said:

people that switched employers

This suggests that there was some type of transaction where one company bought another company.  Is this the case? 

It also suggests that there are multiple employers and you need to identify each of the employers involved and their role.

On 2/6/2024 at 5:34 AM, PS said:

people that switched employers but stayed with us

This suggests that some people who were in the plan that terminated are still in a plan that you work with.  Is this the case?

Link to comment
Share on other sites

7 hours ago, PS said:

I only assisted with the plan termination. 

That's a pretty broad open ended statement that doesn't really let us know the extent of your assistance, involvement, or service contract.

Some of the steps you may or may not have been involved with assisting them could included any of the following:

Amendments and resolutions to terminate the Plan and bring it into compliance with current law.

Preparing and/or distributing notices and withdrawal packages to participants.

Search for lost/missing participants.

Assisting with processing the payments to participants and disposition of assets for lost/non-responsive participants/closing of the trust.

1099-R processing and filing for participant distributions.

IRS nondiscrimination testing for the final year.

Preparation of final year Form 5500

Submission of the Plan to the IRS for Determination Upon Plan Termination.

If it was a DB Plan there are host of other things you could have assisted them with ranging from selecting annuity provider to PBGC termination processing.

And I'm sure I missed a few in this brief overview.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...