Join now!   |   Subscribe   |   Your Cart   |   Sign In
News & Press: State Legislative and Regulatory News

GAO Calls for Clarity Regarding Unclaimed 401(k) Plan Tax Treatment

Wednesday, February 20, 2019   (0 Comments)
Share |

On Feb. 19, 2019, the U.S. Government Accountability Office issued a 59-page report calling on the Internal Revenue Service, Department of Treasury and Department of Labor to provide clarity regarding the tax treatment of unclaimed 401(k) plans transferred to states.

 

The report includes three recommendations:

  1. The IRS Commissioner should work with the Department of the Treasury to consider clarifying if transfers of unclaimed savings from employer-based plans (such as 401(k) plans) to states are distributions, what, if any, tax reporting and withholding requirements apply, and when they apply. 
  2. The IRS Commissioner should work with the Department of the Treasury to consider adding retirement savings transferred to states from terminating defined contribution plans to the list of permitted reasons for rolling over savings after the 60-day rollover period, in a form consistent with the rules adopted on the taxation of transfers of unclaimed retirement savings. 
  3. The Secretary of Labor should specify the circumstances, if any, under which uncashed distribution checks from active plans can be transferred to the states.

 

Learn more or Read the full report


Membership Software Powered by YourMembership  ::  Legal