2019
Department of the Treasury
Internal Revenue Service
Instructions for Form 1098-Q
Qualifying Longevity Annuity Contract Information
Section references are to the Internal Revenue Code unless
than the requirement that annuity payments commence on or
otherwise noted.
before the required beginning date).
The contract does not make available any commutation
Future Developments
benefit, cash surrender right, or other similar feature.
No benefits are provided under the contract after the death
For the latest information about developments related to
of the employee other than the benefits described in
Form1098-Q and its instructions, such as legislation enacted
paragraph (c) of Q&A-17.
after they were published, go to IRS.gov/Form1098Q.
When the contract is issued, the contract (or a rider or
Reminders
endorsement with respect to that contract) states that the
contract is intended to be a QLAC.
In addition to these specific instructions, you also should use
The contract is not a variable contract under section 817,
the 2019 General Instructions for Certain Information
an indexed contract, or similar contract, except to the extent
Returns. Those general instructions include information
provided by the Commissioner.
about the following topics.
Who must file.
An employee includes the owner of an IRA (other than a
When and where to file.
Roth IRA), where applicable.
Electronic reporting.
Corrected and void returns.
Limitations on Premiums—Plans
Statements to recipients.
The premiums paid with respect to the contract on a date
Taxpayer identification numbers (TINs).
satisfy the limitations requirements if they do not exceed the
Backup withholding.
lesser of the dollar limitation of paragraph (b)(2) of Q&A-17 or
Penalties.
the percentage limitation of paragraph (b)(3) of Q&A-17.
Other general topics.
Dollar limitation. The dollar limitation is an amount equal to
You can get the General Instructions for Certain
the excess of $130,000 over the sum of (1) the premiums
Information Returns at
IRS.gov/1099generalinstructions
or
paid on the contract before that date and (2) the premiums
go to IRS.gov/Form1098Q.
paid on or before that date on any other contract intended to
On-line pdf fillable Copies B and C. To ease statement
be a QLAC and that is purchased for the employee under the
furnishing requirements, Copies B and C of Form 1098-Q are
plan, or any other plan, annuity, or account described in
fillable on-line in a pdf format, available at
IRS.gov/
section 401(a), 403(a), 403(b), or 408 or eligible
Forms1098Q. You can complete these copies on-line for
governmental plan under section 457(b).
furnishing statements to recipients and for retaining in your
Percentage limitation. The percentage limitation is an
own files.
amount equal to the excess of 25% of the employee’s
account balance under the plan (including the value of any
Specific Instructions
QLAC held under the plan for the employee) as of that date
over the sum of (1) the premiums paid before that date on the
File Form 1098-Q, Qualifying Longevity Annuity Contract
contract, and (2) the premiums paid on or before that date on
Information, if you issue any contract that is intended to be a
any other contract intended to be a QLAC and that is held or
qualifying longevity annuity contract (QLAC). Prior to
was purchased for the employee under the plan.
annuitization, the value of a QLAC is excluded from the
account balance that is used to determine required minimum
For purposes of the dollar and percentage limitations on
distributions. A QLAC is an annuity contract that is purchased
premiums, unless the plan administrator has actual
from an insurance company for an employee under any plan,
knowledge to the contrary, the plan administrator may rely on
annuity, or account described in section 401(a), 403(a),
an employee’s representation, made in writing or such other
403(b), or 408 (other than a Roth IRA) or eligible
form as may be prescribed by the Commissioner, of the
governmental plan under section 457(b), and that, in
amount of the premiums paid for any other contract intended
accordance with the rules of application of paragraph (d) of
to be a QLAC, but only with respect to premiums that are not
Regulations section 1.401(a)(9)-6, Q&A-17 (Q&A-17),
paid under a plan, annuity, or contract that is maintained by
satisfies each of the following requirements.
the employer or an entity that is treated as a single employer
Premiums for the contract satisfy the requirements of
with the employer under section 414(b), (c), (m), or (o).
paragraph (b) of Q&A-17.
For purposes of the 25% limit, an employee’s account
The contract provides that distributions under the contract
balance on the date on which premiums for a contract are
must commence no later than a specified annuity starting
paid is the account balance as of the last valuation date
date that is no later than the first day of the month after the
preceding the date of the premium payment, adjusted as
employee's 85th birthday.
follows.
The contract provides that, after distributions under the
The account balance is increased for contributions
contract begin, those distributions must satisfy the
allocated to the account during the period that begins after
requirements of Regulations section 1.401(a)(9)-6 (other
the valuation date and ends before the date the premium is
paid.
Nov 13, 2018
Cat. No. 67096Y
2019
Department of the Treasury
Internal Revenue Service
Instructions for Form 1098-Q
Qualifying Longevity Annuity Contract Information
Section references are to the Internal Revenue Code unless
than the requirement that annuity payments commence on or
otherwise noted.
before the required beginning date).
The contract does not make available any commutation
Future Developments
benefit, cash surrender right, or other similar feature.
No benefits are provided under the contract after the death
For the latest information about developments related to
of the employee other than the benefits described in
Form1098-Q and its instructions, such as legislation enacted
paragraph (c) of Q&A-17.
after they were published, go to IRS.gov/Form1098Q.
When the contract is issued, the contract (or a rider or
Reminders
endorsement with respect to that contract) states that the
contract is intended to be a QLAC.
In addition to these specific instructions, you also should use
The contract is not a variable contract under section 817,
the 2019 General Instructions for Certain Information
an indexed contract, or similar contract, except to the extent
Returns. Those general instructions include information
provided by the Commissioner.
about the following topics.
Who must file.
An employee includes the owner of an IRA (other than a
When and where to file.
Roth IRA), where applicable.
Electronic reporting.
Corrected and void returns.
Limitations on Premiums—Plans
Statements to recipients.
The premiums paid with respect to the contract on a date
Taxpayer identification numbers (TINs).
satisfy the limitations requirements if they do not exceed the
Backup withholding.
lesser of the dollar limitation of paragraph (b)(2) of Q&A-17 or
Penalties.
the percentage limitation of paragraph (b)(3) of Q&A-17.
Other general topics.
Dollar limitation. The dollar limitation is an amount equal to
You can get the General Instructions for Certain
the excess of $130,000 over the sum of (1) the premiums
Information Returns at
IRS.gov/1099generalinstructions
or
paid on the contract before that date and (2) the premiums
go to IRS.gov/Form1098Q.
paid on or before that date on any other contract intended to
On-line pdf fillable Copies B and C. To ease statement
be a QLAC and that is purchased for the employee under the
furnishing requirements, Copies B and C of Form 1098-Q are
plan, or any other plan, annuity, or account described in
fillable on-line in a pdf format, available at
IRS.gov/
section 401(a), 403(a), 403(b), or 408 or eligible
Forms1098Q. You can complete these copies on-line for
governmental plan under section 457(b).
furnishing statements to recipients and for retaining in your
Percentage limitation. The percentage limitation is an
own files.
amount equal to the excess of 25% of the employee’s
account balance under the plan (including the value of any
Specific Instructions
QLAC held under the plan for the employee) as of that date
over the sum of (1) the premiums paid before that date on the
File Form 1098-Q, Qualifying Longevity Annuity Contract
contract, and (2) the premiums paid on or before that date on
Information, if you issue any contract that is intended to be a
any other contract intended to be a QLAC and that is held or
qualifying longevity annuity contract (QLAC). Prior to
was purchased for the employee under the plan.
annuitization, the value of a QLAC is excluded from the
account balance that is used to determine required minimum
For purposes of the dollar and percentage limitations on
distributions. A QLAC is an annuity contract that is purchased
premiums, unless the plan administrator has actual
from an insurance company for an employee under any plan,
knowledge to the contrary, the plan administrator may rely on
annuity, or account described in section 401(a), 403(a),
an employee’s representation, made in writing or such other
403(b), or 408 (other than a Roth IRA) or eligible
form as may be prescribed by the Commissioner, of the
governmental plan under section 457(b), and that, in
amount of the premiums paid for any other contract intended
accordance with the rules of application of paragraph (d) of
to be a QLAC, but only with respect to premiums that are not
Regulations section 1.401(a)(9)-6, Q&A-17 (Q&A-17),
paid under a plan, annuity, or contract that is maintained by
satisfies each of the following requirements.
the employer or an entity that is treated as a single employer
Premiums for the contract satisfy the requirements of
with the employer under section 414(b), (c), (m), or (o).
paragraph (b) of Q&A-17.
For purposes of the 25% limit, an employee’s account
The contract provides that distributions under the contract
balance on the date on which premiums for a contract are
must commence no later than a specified annuity starting
paid is the account balance as of the last valuation date
date that is no later than the first day of the month after the
preceding the date of the premium payment, adjusted as
employee's 85th birthday.
follows.
The contract provides that, after distributions under the
The account balance is increased for contributions
contract begin, those distributions must satisfy the
allocated to the account during the period that begins after
requirements of Regulations section 1.401(a)(9)-6 (other
the valuation date and ends before the date the premium is
paid.
Nov 13, 2018
Cat. No. 67096Y
The account balance is decreased for distributions made
increased under paragraph A-2 of Regulations section
from the account during that same period.
1.401(a)(9)-7, to reflect a rollover received after the last
valuation date.
Limitations on Premiums—IRAs
If the excess premium is returned to the non-QLAC portion
The premiums paid with respect to the contract on a date
of the employee’s account as described above, it will not be
satisfy the limitations requirements if they do not exceed the
treated as a violation of the requirement that the contract not
lesser of the dollar limitation of paragraph (b)(2) of
provide a commutation benefit.
Regulations section 1.408-8, Q&A-12 or the percentage
limitation of paragraph (b)(3) of Regulations section 1.408-8,
Death of Employee
Q&A-12.
Surviving spouse is the sole beneficiary. If the employee
Dollar limitation. The dollar limitation is an amount equal to
dies on or after the annuity starting date for the contract, the
the excess of $130,000 over the sum of (1) the premiums
only benefit allowed to be paid (except as provided in
paid on the contract before that date and (2) the premiums
paragraph (c)(4) of Q&A-17) after the employee's death is a
paid on or before that date on any other contract intended to
life annuity payable to the surviving spouse where the annuity
be a QLAC and that is purchased for the IRA owner under
payment is not in excess of 100% of the annuity payment that
the IRA, or any other plan, annuity, or account described in
is payable to the employee.
section 401(a), 403(a), 403(b), or 408 or eligible
governmental plan under section 457(b).
If the employee dies before the annuity starting date, the
only benefit allowed (except as provided in paragraph (c)(4)
Percentage limitation. The percentage limitation is an
of Q&A-17) is a life annuity payable to the surviving spouse
amount equal to the excess of 25% of the total account
where the annuity payment is not in excess of 100% of the
balances of the IRAs (other than Roth IRAs) that an individual
annuity payment that would have been payable to the
holds as the IRA owner (including the value of any QLACs
employee as of the date that benefits to the surviving spouse
held under those IRAs) as of December 31 of the calendar
start. However, the annuity is permitted to exceed 100% of
year immediately preceding the calendar year in which a
the annuity payment that would have been payable to the
premium is paid over the sum of (1) the premiums paid
employee to the extent necessary to satisfy the requirement
before that date on the contract, and (2) the premiums paid
to provide a qualified preretirement survivor annuity (as
on or before that date on any other contract intended to be a
defined under section 417(c)(2) or ERISA section 205(e)(2))
QLAC and that is held or was purchased for the individual
pursuant to section 401(a)(11)(A)(ii) or ERISA section
under those IRAs.
205(a)(2).
For purposes of the dollar and percentage limitations on
Any annuity payable to the surviving spouse of an
premiums, unless the trustee, custodian, or issuer of an IRA
employee who dies before the annuity starting date must
has actual knowledge to the contrary, the trustee, custodian,
start no later than the date on which the annuity payable to
or issuer may rely on the IRA owner’s representation, made
the employee would have started under the contract if the
in writing or in such other form as may be prescribed by the
employee had not died.
Commissioner, of the amount of premiums paid for any other
contract intended to be a QLAC and that are not paid under
Surviving spouse is not the sole beneficiary. In this
the IRA, and the account balance of any other IRA.
situation, the only benefit allowed (except as provided in
paragraph (c)(4) of Q&A-17) after death is a life annuity
payable to the designated beneficiary where the annuity
Consequences of Excess Premiums
payment is not in excess of the applicable percentage
If an annuity contract fails to be a QLAC solely because a
(determined under paragraph (c)(2)(iii) of Q&A-17) of the
premium for a contract exceeds the limits under paragraph
annuity payment that is payable (if the employee dies on or
(b) of Q&A-17, then the contract is not a QLAC beginning on
after the annuity starting date for the contract) or would have
the date that premium payment is made unless the excess
been payable (if the employee dies before the annuity
premium is returned to the non-QLAC portion of the
starting date) to the employee. For more information on the
employee’s account in accordance with paragraph
applicable percentage, see paragraph (c)(2)(iii) of Q&A-17.
(d)(1)(ii)(B) of Q&A-17. If the contract fails to be a QLAC,
When the employee dies before the annuity starting date,
then the value of the contract may not be disregarded under
any life annuity payable to a designated beneficiary (other
paragraph A-3(d) of Regulations section 1.401(a)(9)-5 as of
than a surviving spouse) must commence by the last day of
the date on which the contract ceases to be a QLAC.
the calendar year immediately following the year of the
employee's death.
If the excess premium is returned to the non-QLAC portion
of the employee’s account by the end of the calendar year
Multiple beneficiaries. If an employee has more than one
following the calendar year in which the excess premium was
designated beneficiary under a QLAC, the rules in paragraph
originally paid, then the contract will not be treated as
A-2(a) of Regulations section 1.401(a)(9)-8 apply for
exceeding the limits under paragraph (b) of Q&A-17 at any
purposes of paragraphs (c)(1) and (c)(2) of Q&A-17.
time, and the value of the contract will not be included in the
employee’s account balance under paragraph A-3(d) of
Return of Premiums
Regulations section 1.401(a)(9)-5.
In general, in lieu of a life annuity payable to a designated
If the excess premium is returned to the non-QLAC portion
beneficiary under paragraph (c)(1) or (c)(2) of Q&A-17, a
of the employee’s account after the last valuation date for the
QLAC is permitted to provide for a benefit paid to a
calendar year in which the excess premium was originally
beneficiary after the death of the employee in an amount
paid, then the employee’s account balance for that calendar
equal to the excess of the premium payments made with
year must be increased to reflect the excess premium in the
respect to the QLAC over the payments already made under
same manner as an employee’s account balance is
the QLAC.
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Instructions for Form 1098-Q (2019)
If a QLAC is providing or will provide a life annuity to a
been purchased reaches age 85 or dies. If the individual dies
surviving spouse under paragraph (c)(1) of Q&A-17, it also is
and the sole beneficiary under the contract is the individual's
permitted to provide for a benefit paid to a beneficiary after
spouse (in which case the spouse's annuity would not be
the death of both the employee and the spouse in an amount
required to commence until the individual would have
equal to the excess of the premium payments made with
commenced benefits under the contract had the individual
respect to the QLAC over the payments already made under
survived), you must file Form 1098-Q and provide a
the QLAC.
statement annually to the spouse until the year in which the
distributions to the spouse begin or the year in which the
A return of premium payment under paragraph (c)(4) of
spouse dies, if earlier.
Q&A-17 must be paid no later than the end of the calendar
Issuer's Name, Address, Telephone Number,
year following the calendar year in which the employee dies.
If the employee’s death is after the required beginning date,
and TIN Boxes
the return of premium payment is treated as a required
Enter the name, address (including street address, city or
minimum distribution (RMD) for the year in which it is paid
town, state or province, country, and ZIP or foreign postal
and is not eligible for rollover. See the Instructions for Forms
code), and telephone number of the entity with the filing
1099-R and 5498 for further information regarding rollovers
requirement (issuer) in the box in the upper left corner. The
and RMDs.
telephone number must allow a participant to reach a person
knowledgeable about the information reported on the form.
If the return of premium payment is paid after the death of
a surviving spouse who is receiving a life annuity (or after the
Account Number
death of a surviving spouse who has not yet begun receiving
The account number is required if you have multiple
a life annuity after the death of the employee), the return of
accounts for a recipient for whom you are filing more than
premium payment must be made no later than the end of the
one Form 1098-Q. Additionally, the IRS encourages you to
calendar year following the calendar year in which the
designate an account number for all Forms 1098-Q that you
surviving spouse dies. If the surviving spouse’s death is after
file. See part L in the 2019 General Instructions for Certain
the required beginning date for the surviving spouse, then the
Information Returns.
return of premium payment is treated as an RMD for the year
in which it is paid and is not eligible for rollover.
Plan Number, Name of Plan, and Employer
Who Must File
Identification Number
Any person who issues a contract intended to be a QLAC
If the contract was purchased under a plan, enter the name
that is purchased or held under any plan, annuity, or account
of the plan, the plan number, and the employer identification
described in section 401(a), 403(a), 403(b), 408 (other than a
number of the plan sponsor.
Roth IRA) or eligible governmental plan under section 457(b),
Box 1a. Annuity Amount on Start Date
must file Form 1098-Q.
If the payments have not yet started, enter the amount of the
Furnishing Statements to Participants
periodic annuity payable on the start date.
If you are required to file Form 1098-Q, you must furnish a
Box 1b. Annuity Start Date
statement to the participant annually. For more information
about the requirement to furnish a statement to each
If the payments have not yet started, enter the annuity
participant, see part M in the 2019 General Instructions for
starting date on which the annuity is scheduled to start.
Certain Information Returns.
Box 2. Check if Start Date May Be Accelerated
Truncating participant's TIN on payee statements.
Check the box if payments have not yet started and the start
Pursuant to Regulations section 301.6109-4, all filers of this
date may be accelerated.
form may truncate a participant's TIN (social security number
(SSN), individual taxpayer identification number (ITIN),
Box 3. Total Premiums
adoption taxpayer identification number (ATIN), or employer
identification number (EIN)) on payee statements. Truncation
Enter the cumulative total amount of all premiums paid for the
is not allowed on any documents the filer files with the IRS. A
contract through the end of the calendar year.
filer's TIN may not be truncated on any form. See part M in
Box 4. FMV of QLAC
the 2019 General Instructions for Certain Information
Returns.
Enter the fair market value (FMV) of the QLAC as of the close
of the calendar year.
Manner and time for filing. You must file Form 1098-Q
with the IRS and furnish a statement to the individual in
Boxes 5a Through 5l
whose name the contract has been purchased for each
Enter the amount of each premium paid for the contract and
calendar year beginning with the year in which the premiums
the date of the premium payment.
for a contract are first paid and ending with the earlier of the
year in which the individual in whose name the contract has
-3-
Instructions for Form 1098-Q (2019)
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