Tag Archive for: Compliance

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Scott and Attendees in classroom
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Congratulations to Deposit Compliance School Attendees

Congratulations to the 19 bankers who recently completed the 2022 Deposit Compliance School held August 22 and 23 at the WBA headquarters in Madison and via livestream! WBA’s Deposit Compliance School is designed to give Wisconsin bankers a strong foundation of the various deposit regulations that affect banks. 

  • Aubrie Bobholz, Horicon Bank  
  • Lu Ann Bowman, Mound City Bank, Platteville  
  • Laura Enders, Bank of Sun Prairie  
  • Carol Green, First Community Bank, Milton  
  • Nicole Havel, Dairy State Bank, Rice Lake  
  • Andy Hayes, Capitol Bank, Madison  
  • Kelsey Herold, First Citizens State Bank-Whitewater, Whitewater  
  • Austin Hines, River Falls State Bank, River Falls  
  • Hailey Klaas, Peoples State Bank, Lancaster  
  • Marty MacEacher, Peoples State Bank, Prairie du Chien  
  • Amanda Markell, Bank of Sun Prairie, Sun Prairie  
  • Brett Miller, Capitol Bank, Madison  
  • Brooke Noboa, First Federal Bank of Wisconsin, Waukesha  
  • Brad Olsen, WoodTrust Bank, Wisconsin Rapids  
  • Hunter Olson, American Bank of Beaver Dam, Beaver Dam  
  • Nicole Ramirez, Woodford State Bank, Monroe  
  • Deanna Van Acker, Johnson Financial Group, Racine  
  • Brian Vogeltanz, Bank of Luxemburg, Luxemburg  
  • Evan Whitehead, Settlers bank, Appleton 

Deposit Compliance School Class Photo

 

This school is geared toward bank retail staff, including head tellers, personal bankers, universal bankers and managers, as well as compliance officers, operations personnel, and bank legal counsel. WBA Director – Legal Scott Birrenkott, FIPCO Compliance & Risk Management Advisor Michelle Haslam, and compliance consultant Laureen Lehnberg served as faculty for this year’s Deposit Compliance School.

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August 2022 Compliance Journal

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Executive Letter: WBA Stands Ready to Assist Members

Rose Oswald PoelsBy Rose Oswald Poels

Since the enactment of the Dodd-Frank Act in 2010, WBA has assisted members in understanding and implementing countless layers of new federal regulations — some as straight forward as creating and delivering a new one-page notice, others much more complex, including TRID, mortgage servicing rules, and QM/ATR underwriting standards (and those are only the most recent of new laws).

An area of the Dodd-Frank Act that much of the industry has been anxiously awaiting is that of Section 1071. As a reminder, Section 1071 of the Dodd Frank Act amended the Equal Credit Opportunity Act (ECOA) to require that financial institutions collect and report to the Consumer Financial Protection Bureau (CFPB) certain data regarding applications for credit for women-owned businesses, minority-owned businesses, and small businesses.

Having been in this industry for over thirty years, I will say that the forthcoming business data collection and reporting regulation is of the magnitude — both in cost and in operational impact — of what bankers experienced with the implementation of other industry-changing regulations such as the Bank Secrecy Act, Reg CC, or the SAFE Act. I can recall pre-BSA procedures, and now we operate in an implemented BSA world; a time of in-branch check encoding and processing to today’s electronic presentment, centralized clearing, and near live-time processing; and of course, a time when TILA and RESPA were separate disclosures versus today’s mortgage loan application and closing procedures due to TRID rules.

The same will be true after full implementation of a final Section 1071 rule. This law, once finalized, will change how business credit applications are processed. Data will need to be collected and reported as never before. Some members experience similar types of data collection and reporting under the Home Mortgage Disclosure Act (HMDA), but even non-HMDA reporting banks may be required to comply with Section 1071 data collection and reporting.

Based upon recent agency regulatory agenda filings and court filings earlier this month, it is expected that CFPB will finalize its Section 1071 Small Business Lending Data Collection and Reporting Rule by March 2023. Rest assured, I understand the impact this rule will have on the membership. In my comment letter to CFPB regarding its Section 1071 proposal, I advocated for the collection of only those data points required under the Dodd-Frank Act, a higher exemption threshold, and for a longer implementation period to help lessen the impact of the new regulation.

Late last year, WBA prepared a toolkit to help senior management, commercial lenders, loan processors, compliance officers, and others involved with small business lending to better understand the impact of CFPB’s proposal on the bank. Those resources are still available, and I would recommend those in the areas mentioned become familiar with the general concepts of the proposal, understand what could become law, and begin considering the impact on the bank. Planning will be crucial with a regulation as impactful as what Section 1071 will be.

In addition to being vocal during the regulatory process on Section 1071, WBA has advocated for repeal of Section 1071 with our congressional delegation for the last 10 years. Although it is late in the session, I am pleased to share that Rep. Scott Fitzgerald (WI-05) introduced on July 20 the Making the CFPB Accountable to Small Business Act which would repeal Section 1071 of the Dodd-Frank Act. Rest assured, WBA will continue its strong advocacy at all levels to try and reduce this regulatory burden. In the meantime, WBA plans to create further resources once the final rule is released and will help answer questions related to the new regulation.

Current WBA Section 1071 resources may be found on the WBA Compliance Resources webpage.

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July 2022 Compliance Journal

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Hand reaching toward holographic display of icons relating to compliance
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A Year in Comment Letters

June 1, 2021–May 31, 2022

This year, attorneys Heather MacKinnon, Scott Birrenkott, and President/CEO Rose Oswald Poels submitted 16 comment letters in response to requests for comment on rulemaking affecting the banking industry.

Through this process, the WBA Legal Team was able to advocate on behalf of all WBA members for the betterment of the banking industry. From digital assets to examinations and fees, comment letters are a great opportunity for members of the banking industry to inform agencies about the impact of rulemaking and provide examples.

As part of the rulemaking process within the Administrative Procedure Act (APA), all agencies are required to allow the public an opportunity to comment on proposed rules for a prescribed period (minimally 30 days). All WBA members are encouraged to share their comments with federal and state agencies as requested. Information regarding comment letters, or WBA-created letter templates — when available — are typically shared with the membership in the Wisconsin Banker Daily. Additional rulemaking developments at the federal level are compiled in the monthly WBA Compliance Journal.

Once the public has commented, each agency must determine how to proceed given the feedback received. This year, the WBA Legal Team addressed five federal agencies and further helped inform said agencies on the impact of their proposed rulemaking.

Six Comment Letters Filed with the FDIC

Over the past year, WBA filed six comment letters with Federal Deposit Insurance Corporation (FDIC). Two of WBA’s letters commented on FDIC’s actions regarding examinations. In the first, WBA commented on the FDIC’s proposed hybrid approach to bank examinations and in the second, WBA commented on the post-examination surveys related to FDIC Safety and Soundness and Consumer Compliance examinations. In each letter, WBA emphasized the importance of the FDIC establishing consistent coordination and communication with banks.

Three Comment Letters Filed with the CFPB

WBA wrote three letters this year to the Consumer Financial Protection Bureau (CFPB). Most recently, WBA responded to CFPB’s concerns regarding products which feature “junk fees,” assuring CFPB that the Wisconsin financial services marketplace is competitive, featuring a diverse range of high-quality, convenient, innovative, and competitively priced products and services. Additionally, WBA highlighted that, despite CFPB’s concerns, the market is highly regulated, and that further rulemaking is unnecessary as fees are already subject to disclosure requirements.

Four Comment Letters Filed with the FRB

This year, WBA also filed four comment letters with Board of Governors of the Federal Reserve System (FRB). In one of the letters, WBA addressed FRB’s request for comment regarding the evaluation of account and services requests. WBA acknowledged FRB’s attempt to create consistency, but ultimately expressed concern with allowing access to the payment system by entities with little or no regulatory oversight, lack of protection, and minimal capital and liquidity requirements, among others. WBA proposed that FRB establish standards or requirements for users, maintain ongoing review of those involved, as well as coordinate an FRB-led evaluation committee.

One Comment Letter Filed with the HUD

In late May, WBA expressed support of the Department of Housing and Urban Development’s (HUD) proposal to extend a term for loan modifications. The modification would allow mortgagees to modify Federal Housing Administration (FHA) insured mortgage loans by recasting the total unpaid amount due for a new term limit of 480 months — an increase from a term limit of 360 months; allow FHA-loan borrowers similar flexibility and benefits as is available for Fannie-/Freddie-loan borrowers; and  creates yet another tool for Wisconsin’s financial institutions to use in their continued work to help find solutions for struggling borrowers to retain their homes.

One Comment Letter Filed with the OCC

In a letter filed with the Office of the Comptroller of the Currency (OCC), WBA was able to comment on a final rule to adopt a new Community Reinvestment Act (CRA) framework. This regulation facilitated the issuance of joint CRA to an interagency basis which would allow for greater coordination on all CRA ruling between the OCC, FRB, and FDIC for the benefit of banks serving low- and moderate-income communities.

One Interagency Comment Letter Filed

Some rulemakings are issued on an interagency basis. This year, WBA commented on the FRB, FDIC, and OCC’s proposed interagency guidance on third-party relationships related to risk management. In the letter, WBA commented that this effort would promote consistency in their guidance as well as clearly articulate risk-based principles. In addition, WBA identified several ways Wisconsin banks will be impacted by the new guidance during final implementation.

Conclusion

Industry comment is a critical aspect to the rulemaking process. It is an opportunity for the industry’s voice to be heard, and it is important that the agencies hear from banks about how rulemaking affects you. WBA welcomes feedback on comment letters because it is key that we, and the agencies, hear directly from members.

For more information on the rulemaking process, comments, and upcoming rules, contact the WBA Legal Department at wbalegal@wisbank.com. For a full list of the comment letters filed during the 2021–22 fiscal year, visit www.wisbank.com/advocacy/comment-letter-library.

*This article has been updated from previous published editions

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American flag flying in front of Capitol Building
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Reminder: Juneteenth New Legal Holiday

Last year, President Joe Biden signed a bill on June 17, 2021, to create Juneteenth National Independence Day. The new law amends 5 U.S.C. 6103(a) to add “Juneteenth National Independence Day, June 19” as a specified legal public holiday. While this created a bit of a stir within the lending industry when the bill was signed so close to the date of the new holiday, banks have now had a year to prepare for its second observation.

Banks will have determined the extent to which they will observe the new federal holiday, including whether offices will remain open. As with any time a bank closes, it should consider what functions will remain available. Among other things banks should ensure they have provided adequate notice, consider cut-off times and prompt crediting of payments, access to safe deposit box operation, funds availability schedules, and any impact this might have on lending operations such as closing and rescission rights.

For example, as a result of the new law, the date of June 19 is not a business day under Regulation Z. Because June 19 is a Sunday this year, the holiday will be observed on the following Monday, June 20. For purposes of rescission under Reg Z, a “precise” business day test applies, meaning, the precise day is excluded from the definition of “business day” while the observed holiday (in this example, June 20) is a business day.

In summary, banks should consider if and how they have decided to observe Juneteenth this year and how it will affect their business functions. In addition, banks should consider the regulations with a definition of “business day” to determine how it might affect compliance considerations. Each regulation should be considered individually, as they define “business day” differently.

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Reminder: Revised General QM Loan Definition

With the mandatory compliance date for the new, revised General QM loan definition just on the horizon, banks should ensure their implementation plans are in place. In terms of a quick-look at dates, CFPB issued a final rule on December 29, 2020 (Final Rule) which amends the General QM loan definition in Regulation Z. The Final Rule included a mandatory compliance date of July 1, 2021. However, on April 27, 2021, CFPB extended that mandatory compliance date to October 1, 2022. The General QM Final Rule was effective on March 1, 2021 and, among other things, replaces the existing 43 percent debt-to-income ratio limit with price-based thresholds. As such, it presents the potential for significant changes to a bank’s mortgage lending operation.

To expand upon the new price-based thresholds with a general summary: a loan meets the revised General QM definition only if the annual percentage rate exceeds the average prime offer rate for a comparable transaction by less than the applicable threshold set forth in the Final Rule as of the date the interest rate is set. Additionally, the Final Rule removes Appendix Q as well as any requirements to use Appendix Q for General QM loans. Consequently, it amends the consider and verify requirements in Regulation Z and its associated commentary. First, it outlines the minimum considerations required by creditors, including, for example, the consumer’s current or reasonably expected income or assets. Second, it requires that creditors verify those considerations using reasonably reliable third-party records and reasonable methods and criteria.

Banks have likely already taken time to evaluate the categories of QMs they originate, and how the revised General QM definition may or may not affect its current loan policy and underwriting procedures. Even banks which originate Small Creditor QMs should still consider the extent to which they may or may not original General QMs. For example, does bank originate General QMs? Will it continue to do so, or will it exclusively utilize the Small Creditor QM exception, if applicable?

Given the mandatory compliance date of October 1, 2022 banks should confirm that their implementation steps are in place. Banks should prepare to fully transition current policies and procedures to conform with the new definition and consider what training might be necessary in advance of and after the transition.

As an additional resource, WBA has prepared an ATR/QM Toolkit to assist bankers.

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SBA Releases New Procedure for SBA Loan Review of Partial Approval Forgiveness Decisions

On January 28, SBA released Procedural Notice 5000-827666 regarding SBA loan reviews of PPP Lender partial approval forgiveness decisions. The notice outlines a new process to allow PPP Borrowers to request an SBA loan review of partial approval forgiveness decisions issued by their PPP Lenders. The procedures in the notice apply to loan forgiveness decisions submitted by Lenders to SBA through both the regular forgiveness process as well as the Direct Borrower Forgiveness process. The notice is effective January 27, 2022.

The notice reiterates the process for a partial approval forgiveness decision and the steps that need to be taken by the Lender when it receives a forgiveness application from a Borrower. The notice also outlines a new process for borrower requests of SBA loan review of a partial approval forgiveness decision.

Starting from the effective date of the notice, when a Lender receives a forgiveness remittance from SBA on a partial approval decision, including where the Lender required the borrower to apply for forgiveness in an amount less than the full amount of the loan, the Lender’s post-forgiveness remittance notification must inform the borrower that the borrower has 30 calendar days from receipt of the notification to seek, through the Lender, an SBA loan review of the Lender’s partial approval decision. Within five calendar days of a Lender’s receipt of a borrower’s timely request for an SBA loan review, the Lender must notify SBA through the Platform. The Lender’s notice to SBA of the borrower’s timely request for review must include a copy of the Lender’s notice to the borrower of the reason(s) for the Lender’s partial approval decision. SBA reserves the right to review the Lender’s decision at its sole discretion.

Additionally, within 30 calendar days of the date of the notice, Lenders must notify all of their borrowers on loans that previously received a partial forgiveness remittance from SBA as a result of Lender partial approval decisions, including where the Lender required the borrower to apply for forgiveness in an amount less than the full amount of the PPP loan, that the borrower has 30 calendar days from receipt of the Lender notification to seek, through the Lender, an SBA loan review of the Lender’s partial approval decision. Within five calendar days of the Lender’s receipt of a borrower’s timely request for an SBA loan review, the Lender must notify SBA through the Platform. The Lender’s notice to SBA of the borrower’s timely request for review must include a copy of the Lender’s prior notice to the borrower of the reason(s) for the Lender’s partial approval decision. Again, SBA reserves the right to review the Lender’s partial approval decision at its sole discretion.

In either circumstance, if SBA selects the loan for an SBA loan review as a result of the borrower’s request, the borrower must continue to make payments on the remaining balance of the loan, and the loan is not deferred.

If SBA determines, as a result of the SBA loan review, that the borrower is entitled to forgiveness in an amount greater than the Lender’s partial approval decision and SBA has previously remitted a partial forgiveness payment to the Lender, SBA will remit an additional forgiveness payment to the Lender to make up the difference. SBA will issue an additional Notice of Paycheck Protection Program Forgiveness Payment (Payment Notice) to the Lender.

If the SBA loan review results in a higher forgiveness amount, but less than full forgiveness, SBA will also issue a final SBA loan review decision to the Lender. The Lender must provide a copy of the Payment Notice and, if applicable, the final SBA loan review decision, to the borrower within 5 business days of the remittance and comply with applicable requirements of the Lender Responsibilities Notice. If a borrower has begun making payments on their loan and the SBA loan review results in full forgiveness, the Lender must refund all payments made by the borrower.

If the SBA loan review results in a higher forgiveness amount, but less than full forgiveness, the lender must re-amortize the PPP loan and refund any excess payments made by the borrower.

Note: PPP Borrowers that have received full denial forgiveness decisions from their Lenders should continue to follow the process outlined in the Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as amended by the Economic Aid Act (86 FR 8283, February 5, 2021), as amended.

Lenders may call the Lender Hotline at (833) 572-0502 for live assistance regarding PPP access and support, policy questions and procedures, and Capital Access Financial System (CAFS) and SBA’s Electronic Transmission (E-Tran) systems support. Questions concerning the notice may be directed to the Lender Relations Specialist in the local SBA Field Office.

Notice 5000-827666 is posted on the WBA website.

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Executive Letter: WI Supreme Court Finds Garage is Part of Residence Used by Consumer as Dwelling under WCA

By Rose Oswald Poels

In a four-three opinion filed late last week, the Wisconsin Supreme Court concluded that a “dwelling used by the customer as a residence” under the Wisconsin Consumer Act (WCA) includes a garage attached to the residential building in which the customer lives for purposes of rules that need be followed when creditors proceed with nonjudicial repossession.

On behalf of the membership, WBA participated as an amicus curie in the case of Duncan v Asset Recovery Specialists, Inc. as the case involved the interpretation of statutory language used within the repossession rules of the WCA.

The facts of the case were undisputed by the parties and include that Duncan purchased a vehicle from a dealership; she financed the purchase with a loan. Duncan failed to make payments that came due and eventually was in default. The vehicle served as collateral for the loan, and the bank followed the procedure allowed under Wisconsin law for a “nonjudicial” repossession under Wis. Stat. §425.206(1)(d). The bank met all statutory requirements to proceed with nonjudicial repossession and ultimately retained Asset Recovery Specialists to repossess Duncan’s vehicle. At the time, Duncan rented an apartment unit in a multi-story apartment building. The ground floor of the building consisted entirely of a private parking garage for tenants, and Duncan sometimes kept her vehicle in it.

The central dispute between the parties is whether Asset Recovery Specialists violated Wis. Stat. §425.206(2)(b) when they entered the garage shared by residents in Duncan’s apartment building to repossess her vehicle. The court reviewed language within §425.206(2) which provides in full: In taking possession of collateral or leased goods, no merchant may do any of the following: (a) Commit a breach of the peace. (b) Enter a dwelling used by the customer as a residence except at the voluntary request of a customer. The court focused its review on the statutory language in italics.

Although “dwelling” is undefined in the WCA, the court looked to the word’s ordinary, dictionary definition, and to the use of the word in other sections of the WCA and its Administrative Code. In taking that approach, the court concluded a “dwelling” means, at minimum, a building in which at least one person lives. In proceeding in this manner, the court concluded that “dwelling used by the customer as a residence” in Wis. Stat. §425.206(2)(b) includes a garage attached to the residential building in which the customer lives. In making its conclusion, Asset Recovery Specialists was found to have violated §425.206(2)(b) when they repossessed Duncan’s car from the parking garage of her apartment building without her consent.

While I am disappointed in the court’s opinion, I do not regret WBA’s involvement in the case as an amicus on behalf of the membership as the court’s opinion does offer clarity of the term “dwelling.” This in turn helps members further fine-tune any nonjudicial repossession procedures. Fortunately, Wisconsin’s banks are not heavily engaged in nonjudicial repossession of vehicles, so the impact of the court’s decision in this context I believe is likely minimum. That said, as the effect of the court’s decision broadens the plain language of Wis. Stat. §425.206(2)(b), banks need be aware of the court’s new interpretation to ensure there is no violation of the WCA when repossessing vehicles in a similar setting.

The Wisconsin Supreme Court opinion may be viewed here.

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Time to Gear Up for First-Quarter Reporting Requirements

By Jodie Norquist, CIP, CHSP; Ascensus, a WBA Associate Member 

If your financial organization administers IRAs, health savings accounts (HSAs), and Coverdell education savings accounts (ESAs), you are likely aware of the many reporting deadlines looming in the first quarter of the coming year. Performing these annual administrative tasks can be stressful. After all, compliance errors or missed deadlines can lead to costly financial penalties.

Here’s a rundown of the impending due dates, along with a brief description of the financial organization’s requirements. Please note that if any of these deadlines fall on a Saturday, Sunday, or legal holiday, the deadline is extended to the following business day.

January 31

Fair Market Value Statement

Financial organizations must provide an annual fair market value (FMV) statement to IRA owners and beneficiaries by January 31. These statements must be provided to Traditional, Roth, and SIMPLE IRA owners. They must also be provided to Traditional IRA owners that have received simplified employee pension (SEP) plan contributions. FMV statements are required for both IR accounts and IR annuities, including those that have been annuitized.

NOTE: FMV statements are not required but are recommended for HSAs.

The FMV statement must

  • show the IRA’s FMV as of December 31 of the previous year;

  • be presented in any type of written format;

  • be provided to IRA owners even if no contributions were made to the IRA for that year; and

  • contain a legend designating which information is being furnished to the IRS on Form 5498, IRA Contribution Information.

Required Minimum Distribution (RMD) Statement

If an IRA owner is age 72 or older and is required to take a distribution from an IRA for the year, the financial organization holding the IRA on December 31 of the prior year must provide an RMD statement to the IRA owner by January 31. RMD statements are not required for beneficiaries or for Roth IRA owners. This statement may be combined with the FMV statement.

The RMD statement must

  • inform the IRA owner that an RMD is due for the calendar year,

  • notify the IRA owner of the date by which the RMD must be taken,

  • include an offer to provide a calculation of the RMD amount, upon request, and

  • communicate what information is being reported to the IRS for the year.

This requirement may also be satisfied if a Form 5498 is sent to the IRA owner by January 31. If a financial organization opts to use Form 5498 to satisfy the RMD statement, then the date by which the RMD must be distributed should be entered in Box 12a, RMD date, and the RMD amount in Box 12b, RMD amount. However, keep in mind that if an IRA owner must take an RMD for the year, the financial organization is not required to report any RMD information to the IRS on Form 5498, other than the fact that an RMD is due.

SIMPLE IRA Account Statement

Financial organizations must provide SIMPLE IRA owners with an account statement by January 31. Although the IRS hasn’t provided any specific guidance on the form that the account statement must take, the SIMPLE IRA account statement must include

  • the SIMPLE IRA’s account balance as of the end of the previous calendar year;

  • a summary of the account activity throughout the previous calendar year; along with

  • any distributions taken or fees charged against the account, as well as all contributions.

Coverdell ESA Year-End Statement

While year-end statements for Coverdell ESAs are not required, they are recommended. Before 2003, the FMV of an ESA—originally known as an Education IRA—was reported on Form 5498, IRA Contribution Information, which suggests reporting ESA FMVs as a “best practice.” The recommended deadline for providing a year-end statement to the designated beneficiary is January 31. This statement should show

  • the ESA’s FMV as of December 31 of the previous year, and

  • contribution activity for the calendar year.

IRS Form 1099-R

Financial organizations must report Traditional, Roth, and SIMPLE IRA distributions made during the calendar year on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to IRA owners and beneficiaries by January 31.

Distributions reported on Form 1099-R include

  • rollovers,

  • recharacterizations, and

  • conversions.

IRS Form 1099-SA

HSA and medical savings account (MSA) owners must be sent a Form 1099-SA, Distributions from HSA, Archer MSA, or Medicare Advantage MSA, by January 31, which reports their distributions for the previous year.

IRS Form 1099-Q

ESA distributions that were taken during the previous calendar year are reported on IRS Form 1099-Q, Payments From Qualified Education Programs, which is due to recipients by January 31.

IRS Form 945 and 945-A

Financial organizations must report amounts withheld by payers to the IRS on Form 945, Annual Return of Withheld Federal Income Tax. Form 945 is due to the IRS by January 31 of the year following the year the taxes are withheld.

NOTE: If withholding deposits are made on time and in full, the due date for filing Forms 945 and 945-A is February 10, rather than January 31. 

Some payers are required to file Form 945-A, Annual Record of Federal Tax Liability, in addition to Form 945, depending upon the payer’s withholding depositor status. Monthly depositors file only Form 945, which lists the amount of nonpayroll withholding collected for each month. Semiweekly depositors, however, file Form 945-A with Form 945 to report nonpayroll withholding. Form 945-A reports the amount of nonpayroll withholding collected each day. The IRS uses Form 945-A to match the tax liability to deposits to determine whether the withholding tax liabilities have been timely deposited.

Employer SEP Contribution Notice

Employers that make SEP plan contributions for employees must notify employees of all discretionary contributions by the later of

  • January 31 of the year following the year for which the contribution is made, or

  • 30 days after the contribution is made (potentially as late as the SEP plan sponsor’s tax return due date, including extensions).

February 28

IRS Forms 1099-R, 1099-Q, and 1099-SA

Forms to report distributions are due to the IRS by February 28 if filing on paper. The paper form must be filed with a Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

March 15

IRS Forms 1099-R, 1099-Q, and 1099-SA

Forms 1042 and 1042-Srm 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, is filed to report tax withheld by the payor on certain payments (including IRA distributions) to foreign persons, including nonresident aliens. Form 1042 must be filed with recipients’ Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, by March 15 of the year following the year of distribution.

March 31

IRS Forms 1099-R, 1099-Q, and 1099-SA

These forms used to report distributions from IRAs, Coverdell ESAs, HSAs, and MSAs are due to the IRS by March 31 if filing electronically. Financial organizations must file electronically if there are 250 or more returns of any one type.

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Madison, WI 53718

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