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 QLAC is required to file Form 1098-Q with the IRS every year to report the status of the contract. This form is issued by the IRS (Internal Revenue Service) every year and was last revised in 2019.
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 IRS Form 1098-Q?
Information required to file Form 1098-Q
- Taxpayer’s (ISSUER/ PARTICIPANT) information
- Account number
- Plan details
- Premium details
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.
- Box 1a: Annuity Amount on Start Date
- Box 1b: Annuity start date
- Box 2: Check if the start date may be accelerated
- Box 3: Total premiums
- Box 4: FMV of QLAC
- Box 5a to l: Month-wise Premiums - Enter the amount of each premium paid for the contract
- Box 7: Case Number
- Box dd: Date of the premium payment for month-wise premiums.
Who can use Form 1098-Q?
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. Form 1098-Q obtains three copies of the forms the first copy goes to the IRS, the second copy goes to the Participant, and the third copy foes to the Issuer.
Form 1098-Q deadline?
IRS Paper Filing
IRS Electronic Filing
Note: If the due date/deadline falls on a Saturday, Sunday, or federal holidays, the filer may need to E-file on the next business day.
Get Started by Registering with Tax2efile Today!