The IRS just dropped Revenue Ruling 2025-15, and while it’s not revolutionary, it’s a reminder that when it comes to uncashed distribution checks, constructive receipt still rules the day.
Here’s the deal: If a participant or beneficiary doesn’t cash their distribution check, it doesn’t matter—the plan still has to withhold taxes and issue a Form 1099-R. No refund, no do-over, unless there was an actual calculation error. The check was issued, they could have cashed it, and that’s what counts.
If the plan sends a replacement check, you don’t withhold again—unless the second check is for more (say you added interest). Then you withhold on the difference and report that extra piece separately.
Bottom line? Participants can’t dodge taxes by ignoring their money, and plan sponsors need to report distributions based on the facts at the time of payment, not whether the check gets cashed.
No surprises here, just classic IRS: If you make a payment, you report it. The end.
