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February 16, 2009

Payer ( Payor)

Your Guide


The party responsible for processing distributions from retirement plans and performing any required tax-withholding.

For IRAs and 403(b) plans, the payer is the financial institution which can be a bank, brokerage firm or credit union.

For qualified plans, the payer is the plan administrator or trustee. In some cases, trustees assigns the responsibility of payer to financial institutions.

Referring Cite

IRC § 3405(e) , Temp. Treas. Reg. §35.3405-1T, IRS Instructions for filing form 1099-R

Additional Helpful Information

The plan administrator may pass on the responsibly of paying and withholding  to another party, such as a custodian or other financial institution. Treas. Reg. §31.3405(c)-1, Q&A-4, -5.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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