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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.

How to File Form 1098-Q?

1098 Q Form
Information required to file Form 1098-Q
  • Taxpayer’s (ISSUER/ PARTICIPANT) information
  • Account number
  • Plan details
  • Premium details (Month-wise payment details)

Watch our step by step video for Form 1098-Q

The account number is required if you have multiple accounts for a recipient for whom you are filing more than one Form 1098-Q. The IRS encourages you to designate an account number for all Forms 1098-Q that they file.

Form 1098- QLAC Instructions:
  • Box 1a: Annuity Amount on Start Date
  • Box 1b: Annuity start date
  • Box 2: Checkbox, Check if the start date may be accelerated
  • Box 3: Total premiums
  • Box 4: FMV of QLAC
  • Box 5a to 5l: Month-wise Premiums - Enter the amount of each premium paid for the contract
  • Box dd: Date of the premium payment for month-wise premiums.

Who Needs to File 1098-Q Form?

Any person who issues a contract intended to be a QLAC that is purchased or held under any plan, annuity, or accounts described in sections 401(a), 403(a), 403(b), 408 (other than a Roth IRA) or eligible governmental plan under section 457(b), must file Form 1098-Q. Any taxable amount of the distribution will be reported on the beneficiary’s income tax return. Distributions used to pay for nonqualified expenses are subject to tax and a 10% penalty on the earnings portion of the withdrawal.

When is the Due Date to File Form 1098-Q?

Filing Type Deadline
Recipient copy January 31st
IRS Paper Filing February 28th
IRS Electronic Filing March 31st

Note: If the due date/deadline falls on a Saturday, Sunday, or federal holiday, the filer will need to E-file 1098 on the next business day.

Why File 1098-Q Tax Return?

1098-Q Form is filed if the filer faced any issue with any contract that is intended to be a qualifying longevity annuity contract (QLAC).

For more information on Form 1098-Q, please visit IRS.

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