What is Form 1098-Q?
Form 1098-Q is used to report the purchase of any contract intended to be a Qualifying Longevity Annuity Contract (QLAC) in a calendar year during a particular tax year. The filer who issues a contract intended to be a 1098-Q is required to file Form 1098-Q with the IRS every year to report the status of the contract
Although, the issuer must annually furnish a statement to the participant to whom the contract was sold. Beginning the first year when the premiums are paid and ending the year before the participant dies or turns 85 years old. 1098-Q Form allows the participant to have their taxable income and the overall amount owed to the IRS reduced. If the excess premium is returned to the non-QLAC portion of the employee’s account as described above, it will not be treated as a violation of the requirement that the contract does not provide a commutation benefit.