2017 ESOP Benefit Payment Government Filings (IRS Forms 1099-R, 1096, 945)

If you paid any ESOP or other qualified retirement plan distribution of $10 or more last year you will have to prepare and file some government forms: Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

2016 ESOP Benefit Payment Government Filings (IRS Forms 1099-R, 1096, 945)

If you paid any ESOP or other qualified retirement plan distribution of $10 or more last year you will have to prepare and file some government forms: Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

Qualified Charitable Distributions (QCD)

The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) was signed into law on December 18, 2015.  One item covered under the law was the permanent extension of the option to take a qualified charitable distribution (QCD).  This option, first available in 2006, allows IRA participants to exclude up to $100,000 from gross income for donations paid directly to a qualified charity from their IRA.

2015 ESOP Required Minimum Distributions (RMDs)

ESOPs and other qualified retirement plans require that plan participants begin taking a distribution of their retirement plan benefits after they reach a certain age. This distribution, also known as an IRS Required Minimum Distribution (RMD), is required for plan participants annually starting with the year that the participant reaches 70 ½, or if later, the year in which the participant retires. [If the account is an IRA or the account owner is a 5% owner sponsoring the plan, the RMD must begin upon attainment of 70 ½ .]

ESOP Diversification

The Tax Reform Act of 1986 established the ESOP diversification rules under IRC Section 401(a)(28) for qualified participants during the qualified election period.  ESOP diversification can be satisfied by a distribution, a transfer to another qualified plan, or offering three or more investment options in the ESOP (certain requirements apply).

2013 ESOP Required Minimum Distributions (RMDs)

ESOP Distribution Policy – Method

ESOP Distribution Policy - Form

Qualified Charitable Distributions Rules for 2012 and 2013

If you have a participant that missed their 2012 ESOP Required Minimum Distributions (RMDs) deadline, the IRS has provided another opportunity for the participant to satisfy their 2012 RMD requirements.  The American Taxpayer Relief Act of 2012 (ATRA) extended the qualified charitable distribution (QCD) provisions for 2012 and 2013.  [The rules are very similar to the 2010 and 2011 Qualified Charitable Distributions Rules.]

Handling QDROs in your ESOP

A domestic relations order (DRO) is a judgement, decree, or order that is made pursuant to state domestic relations law that relates to the provision of child support, alimony payments, or maritial property rights for the benefit of a spouse, former spouse, child, or other dependent of a participant.

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