NUA Reporting

Submitted by Keith Matthews on Wed, 2015-04-15 21:10

A little bit outside of the IRA discussion however I thought someone in this forum might know the answer to the following. A former participant in a major employer’s plan decided to move the employer stock to a non-qualified account for purposes of NUA. It was done correctly as part of a Lump Sum Distribution. However the participant was expecting the stock to show up on the 1099R for tax reporting purposes. The dollars rolled to the IRA show up but nothing about the employer stock distribution. The plan administrator (which is “in house” at the employer) says they don’t need to include that information on the 1099R and gave the proper information to the former participant via a statement. In other words, nothing show up in boxes 1, 2a, or 6 of the 1099R regarding employer stock. Can they choose do this?



Submitted by Alan - IRA critic on Wed, 2015-04-15 21:30

  • No. They must issue a separate 1099R using a different code in Box 7. The separate 1099R will include the total value of the shares in Box 1, the taxable cost basis in 2a, the NUA in Box 6, and if there are after tax contributions allocated to the shares, Box 2a will be less than Box 5 will show the difference. Conversely, the IRA rollover 1099R will be coded G in Box 7 with 0 in 2a. This must be a small employer with limited experience with NUA, and I would refer them to the 1099R Instructions.

 



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