Employees can self-certify late 401(k) rollovers — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Employees can self-certify late 401(k) rollovers

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New employees generally have 60 days to roll over their old 401(k) plan assets into your 401(k) plan. Those who miss the deadline are subject to an early distribution tax. Under new guidance, the IRS will allow plan administrators to accept late rollovers if employees self-certify, in writing, that they couldn’t make their rollovers on time due to one of these circumstances:
  • Their checks were lost, never cashed or deposited into accounts that they mistakenly thought were eligible retirement plans
  • Their homes were severely damaged, or a family member was seriously ill or died
  • A postal error occurred
  • Distributions were made on account of tax levies, but the proceeds were returned to them
  • Distributing plans didn’t timely provide required information to receiving plans.

You may rely on these self-certifications unless you have actual knowledge to the contrary. Employees must make their rollovers within 30 days after the reasons listed in their letters no longer apply. Tip: Keep a copy of their letters on file. (Rev. Proc. 2016-47, IRB 2016-37)

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