NUA
In 2008 at age 64 the employee retired and elected a distribution of only the “after tax” balance, would this impact NUA on the remainder of the plan employer stock balance?
thanks
In 2008 at age 64 the employee retired and elected a distribution of only the “after tax” balance, would this impact NUA on the remainder of the plan employer stock balance?
thanks
Permalink Submitted by Alan - IRA critic on Fri, 2014-03-07 22:45
The prior distribution, if taken after separation from service even though in the same year would probably be considered an intervening distribution and eliminate NUA. If the after tax balance had been distributed in the same year as the remainder of the lump sum distribution instead of the year of separation it would have been OK. That said, the plan might still show NUA on the 1099R Box 6, but the employee should ask about that before ordering the rollover. In addition, if the employee will reach 70.5 this year the RMD will have to be distributed from the plan.