Xerox Overpayment | Ed Slott and Company, LLC

Xerox Overpayment

Hello, I have a client who received a letter from Xerox that states there was an over payment from a direct rollover in 2017. The letter states that the client needs to send $xxxxx amount back to Xerox. Since this was from 2017 the distribution will be coded as an "aged based" distribution. Since this will be reported as income for the client, an thoughts on how the client would be able to show that the money is consider to be an excess contribution that may be subject to the 6% penalty?

Thank you.

Take a look at a recent thread posted by georgenorris. It contains the info needed to complete the corrective distribution from the IRA. But before client returns any money to the plan, they should request a more detailed explanation why the funds are Xerox's and not the client's. For example, was there a matching contribution from the company that was not correct?  The 1099R that was issued for 2017 will probably be re issued as two forms, one for the excess amount not eligible for rollover and the other for the portion that was allowable as a direct rollover. This will result in an amended 2017 return. 

 

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