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Economy  + Regulation  | 
IRS Clarifies Tax Reporting Rules for Uncashed Retirement Plan Checks, Reissued Payments 

IRS Clarifies Tax Reporting Rules for Uncashed Retirement Plan Checks, Reissued Payments 

The Internal Revenue Service (IRS) has issued new guidance clarifying how employers must handle tax withholding and reporting when retirement plan distribution checks go uncashed and are later reissued. Revenue Ruling 2025-15 outlines the federal tax treatment in cases where a participant receives a distribution check from a qualified retirement plan, does not cash it, and subsequently receives a replacement check. 

The IRS states that employers are not permitted to claim a refund or adjustment for taxes withheld on the original uncashed distribution, even if the check is voided and reissued. Once the taxes are withheld and remitted to the Treasury, the action is considered final. Importantly, when the reissued check matches the value of the original distribution, no additional withholding is required. However, if the reissued check includes an increased benefit amount, the difference must be treated as a new distribution and is subject to standard tax withholding requirements. 

In terms of reporting, plan sponsors must report the original distribution amount on IRS Form 1099-R regardless of whether the check was ever cashed. If the reissued payment includes an increase of $10 or more, that additional amount must be reported separately as a second distribution. 

The updated ruling reinforces the IRS’s long-standing position that withholding obligations are based on the issuance—not the cashing—of a distribution check and ensures that both tax and information reporting obligations remain consistent, even in cases of delayed or uncashed payments. 

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About Joe Palmisano

Joe Palmisano is editorial director of Connect Money, where he oversees daily coverage of alternative assets, direct investments, financial advisory and the economy. He brings three decades of experience as a financial journalist, analyst and portfolio manager. Before joining Connect Money, Palmisano wrote for The Wall Street Journal, covering foreign exchange, global fixed-income and equity markets. He later served as a senior research analyst and portfolio manager, producing market analysis and managing foreign exchange and U.S. equity portfolios for FX Concepts. His work has also appeared in SFO Magazine and CMT Association publications. Palmisano earned a bachelor’s degree in finance from The American University and holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.