@jessicajude wrote:
Hi David,
Do you have any guidance when the plan servicer refuses to amend the 1099R? Backstory... my husband's role was eliminated March of last year. He did go back to work for the same employer after being off work for ~6 weeks. However, payroll did not resume loan payments until the loan was already defaulted in the July timeframe. Since the loan payments were being withheld from his paycheck from that point on, it was quite a surprise when we received a 1099R for the full defaulted loan amount (with code L in box 7). Through research, I came across the QPLO, which I believe this qualifies for as it was due to termination. However, Empower, the servicer of his 401(k), has been no help whatsoever. They have no intention of complying with the QPLO guidelines per the IRS. We have called multiple times and the "backoffice" will not have anything to do with a QPLO. They are telling us we should handle with an accountant. It's been very frustrating and we are at a loss in how to proceed. The tax liability is ~$10,000. Do you have any guidance on how to handle?
@dmertz
[edited]
OK, I'm updating my answer because I see in your question that the distribution was code L, not code M (you are responding to a post about code M and I did not see code L in your question.)
Given this was code L, and the timeline, I agree with @dmertz 's analysis.
