Certified Plan Sponsor Professional (CPSP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certified Plan Sponsor Professional Exam. Use flashcards and multiple choice questions with full explanations. Achieve exam success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What form must be issued to a participant after a required minimum distribution is made?

Form 5500
Form 1099-R
Form 945
Form W-2

The correct answer is: Form 1099-R

The correct form that must be issued to a participant after a required minimum distribution (RMD) is made is Form 1099-R. This form is essential for reporting distributions from retirement accounts including pensions, annuities, IRAs, and other qualified plans. When a participant takes a required minimum distribution, the plan or financial institution must report the amount of the distribution to both the IRS and the participant. Form 1099-R serves this purpose, as it provides details such as the total amount distributed, the taxable portion, and any federal income tax withheld. In contrast, Form 5500 is an annual report related to employee benefit plans, Form 945 is used for reporting withheld federal income tax from nonpayroll payments, and Form W-2 is used for reporting wages, tips, and other compensation paid to employees. None of these forms specifically address the requirements associated with reporting distributions from retirement accounts.