What is the purpose
of Form 1099?
The IRS requires that any distribution taken from your tax-advantaged savings
account last year be reported on an IRS Form 1099.
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What is Principal Trust Company's role?
We serve as trustee of your retirement plan and are partnered with your
broker who handles your investment needs for your plan. As trustee of your
plan, we are required to report distributions to the IRS that you took from
your plan last year. Principal Trust CompanySM is the trade name
of Delaware Charter Guarantee & Trust Company.
What do I do with this form?
When you file your federal and state returns, you may need to attach
a copy of this form to your returns.
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When does Principal Trust Company send this
information to the IRS?
We are required to send the information to the IRS by March 31 of the
year following the year in which the distribution occurred.
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Where did Principal Trust Company get the data
to complete the Form 1099?
We received information for your Form 1099 from various sources, including:
- Investment account statements
- Checks that we received
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When does Principal Trust send this information
to the IRS?
This information will be provided to the IRS by March 31 of the year
following the year in which the distribution occurred.
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What
do I do if I have already filed my taxes and did not report this amount?
You may need to file an amended return that includes the information
contained on this form. Consult your tax or legal advisor for further
information.
Why was I sent this form for the amount
I received from a deceased/divorced person's account?
The IRS requires all assets received by an individual from an account
due to death or divorce be reported on this form.
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When will the correction box be checked
on this form?
Any changes after Principal Trust provides distribution information
to the IRS (late March) will result in a new form being issued with
the correction box checked. This corrected information will also be
provided to the IRS.
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How do I change my tax election on periodic
payments?
Make a point to review your elections
each year to insure you are paying sufficient tax through withholding - your tax election stays in force until
you revoke it. You can change your tax elections on periodic payments (set up on a weekly, monthly, quarterly or annual basis) at any time, and you can choose to have
no federal tax withheld. If you wish to change your election, please
contact your brokerage firm and they will provide you with the appropriate
form. Please see Publication
505 for more information.
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What is Form 1099-R?
The IRS requires that we report any distributions that you took from
your retirement plan last year (even if you rolled them into another
plan) to you on IRS Form 1099-R . We will be sending this same
information to the IRS.
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Why was money withheld for taxes?
For a distribution from an IRA account, the IRS requires withholding
of 10% for federal withholding, unless you elected in writing
not to have taxes withheld.
For an employer sponsored plan, 20% federal withholding is required
from any distribution that is eligible to be rolled into another qualified
plan or IRA. State taxes may have been withheld if required
by the state in which you reside.
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Why was "Taxable amount not determined"
(Box 2b) checked when an amount appears in the "Taxable amount"
(Box 2a) field?
The IRS requires that the full amount of your distribution be reported
in "Gross Distribution" (Box 1) and in "Taxable Amount"
(Box 2a). "Taxable amount not determined" (Box 2b) may
be checked because you may have made non-deductible (after-tax)
contributions to your IRA. For qualified employer
plans, the taxable amount can be determined — so Box 2b will not
be checked. Please consult with your tax advosor or legal counsel to
determine if you made non-deductible IRA contributions.
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Why is my refund of an over-contribution
to my IRA or qualified retirement plan being reported on Form 1099-R?
The IRS requires us to report all assets removed from a retirement
account. The taxability of your over-contribution refund depends upon
whether you had taken a deduction for your contribution. The tax code
used to describe the distribution is:
- Code P: Removed excess in 2007 and excess was contributed in 2006.
- Code 8: Removed excess in 2007 and excess was contributed in 2007.
- Code D: Removed excess in 2007 and excess was contributed in 2005 or prior.
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Why am I receiving a 1099-R form on a distribution
from my employer's retirement plan that was rolled directly into an IRA?
This is called a direct rollover. We are required to report the assets
leaving the employer plan on Form 1099-R. Your successor trustee is
required to report a rollover contribution of the same assets on IRS
Form 5498. You may want to contact them to ensure that they will be
reporting the rollover properly.
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Why did I receive a 1099-R form for my rollover
from one IRA to another IRA?
A rollover occurs when money is distributed from one tax-deferred account
and deposited within 60 days to another tax-deferred account. The trustee
of the receiving IRA will issue a Form 5498 that will tell
the IRS that you deposited the money into another IRA.
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Why did I receive a 1099-R for my recharacterization/conversion?
If you convert or recharacterize assets from one type of IRA to another,
the amount is subject to income tax. As in the case of a rollover, with
a recharacterization, the trustee of the second IRA (to which the contribution
was converted) will issue a Form 5498. That form tells the IRS that
you deposited the money into another IRA.
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What is Form 1099-Q?
The IRS requires that we report to you on IRS Form 1099-Q any distributions
that you took from your Coverdell ESA last year. We will be sending
this same information to the IRS. When you file your federal and state
tax returns, you may need to include information reported on this form.
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Why is there no Earnings (Box 2) or Basis
(Box 3) on my Form 1099-Q?
For Coverdell ESA distributions made in 2007 we are not required to
report amounts in Boxes 2 and 3. Instead we may report the fair market
value of your Coverdell ESA as of December 31, 2007, in the blank box
below Boxes 5 and 6.
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Why is there no Fair Market Value (FMV) on
my Form 1099-Q?
We rely on your investment firm to provide this information to us.
This data was not available at the time your Form 1099-Q was printed
for this mailing.
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Why
is my refund of an over-contribution from my ESA being reported on Form
1099-Q?
The IRS requires us to report all assets removed from a Coverdell ESA.
Because contributions to a Coverdell ESA are not deductible, only the
earnings are taxable. The IRS does not require the use of tax codes
on Form 1099-Q.
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What is Form 1099-SA?
The IRS requires that we report to you on IRS Form 1099-SA any distributions
that you took from your Health Savings Account last year. We will be
sending this same information to the IRS. When you file your federal
and state tax returns, you may need to include information reported
on this form.
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Why is my refund of an over-contribution
from my Health Savings Account being reported on Form 1099-SA?
The IRS requires us to report assets removed from a Health Savings
Account. The excess contribution is not taxed when distributed, but
the net income attributable is attributable as income for the tax year
in which the distribution occurs. Consult your tax or legal advisor
for further information.
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