1099R

If participant terminated in 2024, but did not receive distribution until 2025 (beginning of year)

Do you file a 1099r for 2024 or 2025?

When did the assets leave the plan?

2025

1 hour ago, Egold said:

2025

So I’m assuming the check was written and cashed in 2025. Seems it would be a 2025 1099. 

I agree with the "2025" answer above, since all actions   (writing/sending check;  receiving/depositing check) clearly occurred in 2025.   The (2024) termination date is not relevant for determining the taxable year.

What about when the Plan completes its processing in late December, sending the check in the last 2-3 days of December, when:

1.   Plan knows the participant received (and deposited) the check on or after January 2 ?

2.  Plan does NOT know the date the Participant received the check ?   Is there a "presumptive" date of receipt?

I looked in the 1099 instructions and found no discussion regarding this.

In my opinion, the distribution should be taxable to participant in the year he RECEIVED the check,  but how is the Plan able to determine this in the 2nd situation above?

....  Jeff

If check written and sent in December, it is a 2024 1099.

This was settled with Revenue Ruling 2019-19.  If the check was written in 2024, it is reported by the plan as 2024 income to the participant.  Any withholding is reported as withholding in 2024.

Yes, the timing may seem unfair.  Yes, the circumstances of the delay in cashing the check may have been beyond the control of the participant (lost in the mail, wrong address, the dog ate the check).  None of this by itself changes the year of taxation for distribution.  A case possibly may be made for a genuinely missing participant.

Here is an excellent write-up about RR 2019-19 - https://www.blankrome.com/publications/questions-after-irs-guidance-uncashed-401k-checks

Enjoy!

It's little things like this that make this forum so important.... so valuable. 

In the example where the check was generated/written in 2024 but ultimately cashed early in 2025,  I would have gone with the reasoning that the funds left in 2025 therefore it is a 2025 payout.  

How about this... Letter of Authorization dated December 28, 2024 submitted to the financial advisor to payout a terminated employee.  The funds were to be transfered/ach'd/wired... not a check...  to  the participant but the payout is not actually complete until 2025.  Would you go by the LOA date?  A 2024 payout and 1099-R?

Follow-up to post above from @Paul I.  The text of Rev. Ruling 2019-19 is here:  https://www.irs.gov/irb/2019-36_IRB#REV-RUL-2019-19