We'll discuss what the Form 1099-R is and what role a business plays in its filing and reporting. What is Form 1099-R? Form 1099-R is an IRS information return that reports specific types of taxable non-employment income that taxpayers may receive outside of their regular pay or salary. Form 1099-R is used to report the withdrawals or distribution of $10 or more for the following: Retirement and profit-sharing plans IRAs – individual retirement arrangements Annuities, pensions, insurance contracts, survivor income benefit plans Disability payments (permanent and total) under life insurance contracts Charitable gift annuities Retirees are the most common recipients of Form 1099-R, but people who are currently employed may also get them for a host of different reasons. Who Files Form 1099-R? It is the employing business’s responsibility to file Form 1099-R – though, most often, the 401(k) plan manager or custodian for your organization will be the one who files this form with the IRS and then sends your employee a copy. Who Receives Form 1099-R & Why? Any and all of your employees who receive a retirement plan distribution in the amount of $10 or more should receive this form. There are some other situations that warrant a 1099-R as well, so let’s go through some of those. Those individuals who took out a loan from their employer-sponsored retirement plan, but were unable to pay it off in time, should receive a Form 1099-R as well. They’ll also receive a form if they took out a loan but left your company before they finished paying it off. There are several reasons an employee could receive a retirement distribution, and those reasons are marked individually on the form. For example, if an employee receives a distribution for more than one reason, you or your retirement plan manager or custodian will need to file a separate form with each appropriate code (there is no way to report multiple codes on a single form). Here …
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