1099-R and Tax Payment Services

Safe, Compliant 1099-R Distribution Solutions

All retirement plan 1099-R distributions must be handled with extreme care, and adherence to the strict filing rules and timelines is critical. To help protect you and your plans, PenChecks can produce and file 1099-R forms – and remit taxes – for distributions that have already been processed by another party. We offer this convenient and fully compliant 1099-R tax payments service with both rollover distributions and lump sum distributions for which taxes have not yet been paid.
  • 1099-R Processing for IRA Rollover Distributions

    If you or a third party have already sent out a rollover payment with no taxes due, you still need to complete a Form 1099-R, report it to the IRS, and distribute it to the participant. PenChecks relieves you of this administrative drudgery by:

    • Collecting all payment details
    • Reporting the information to the IRS and appropriate state tax agencies
    • Producing, mailing and filing the participant 1099-Rs in January

Managing the Untaxed 1099-R Lump Sum Distribution

If not handled properly, processing withheld taxes on lump sum distributions can have disastrous financial consequences to a qualified plan. When you send lump sum payments to participants in which federal or state taxes have been withheld but not yet paid, you still must:

  • Remit the taxes to the IRS and/or appropriate state tax agencies
  • File a 1099-R and annual tax reconciliation (Form 945) with the IRS
  • Mail the 1099-R form to the participant

PenChecks’ 1099-R processing solution can relieve you of this administrative burden by:

  • Collecting all distribution details
  • Receiving funds to pay the taxes due and remit those funds to each proper taxing authority
  • Filing all required forms with the appropriate tax agencies
  • Producing and mailing the participant Form 1099-Rs in January

Reporting and Withholding Requirements

To ensure full compliance with all IRS retirement plan distribution regulations, PenChecks:

  • Collects all pertinent distribution details from the client via a 1099-R Processing Form (or spreadsheet template for bulk processing).
  • Files all required tax forms, such as 1099-R and 945, under our own trust tax ID number.

Limitations to Note:

  • In order to remit taxes on your behalf, PenChecks must receive all tax funds into the PenChecks, Inc. Employee Benefit Distribution Trust.
  • PenChecks cannot provide the 1099-R Only processing service for any distributions where the taxes have already been paid by a party other than PenChecks.
  • All previous distributions for which taxes were withheld and paid by another party in the current tax year will still require completion of a separate Form 945. This form must be filed with the trust tax ID number used in the distribution processing.

For further assistance, call our Client Service Center at (800) 541-3938.

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