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2016

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

When the contract is issued, the contract (or a rider or

otherwise noted.

endorsement with respect to that contract) states that the

contract is intended to be a QLAC.

Future Developments

The contract is not a variable contract under section 817,

For the latest information about developments related to

an indexed contract, or similar contract, except to the extent

Form 1098-Q and its instructions, such as legislation enacted

provided by the Commissioner.

after they were published, go to

An employee includes the owner of an IRA (other than a

Reminder

Roth IRA), where applicable.

In addition to these specific instructions, you should also use

Limitations on Premiums — Plans

the 2016 General Instructions for Certain Information

Returns. Those general instructions include information

The premiums paid with respect to the contract on a date

about the following topics.

satisfy the limitations requirements if they do not exceed the

lesser of the dollar limitation of Q&A-17(b)(2) or the

Who must file (nominee/middleman).

percentage limitation of Q&A-17(b)(3).

When and where to file.

Electronic reporting requirements.

Dollar limitation. The dollar limitation is an amount equal to

Corrected and void returns.

the excess of $125,000 over the sum of (1) the premiums

Statements to recipients.

paid on the contract before that date and (2) the premiums

Taxpayer identification numbers.

paid on or before that date on any other contract intended to

Backup withholding.

be a QLAC and that is purchased for the employee under the

Penalties.

plan, or any other plan, annuity, or account described in

Other general topics.

section 401(a), 403(a), 403(b), or 408 or eligible

governmental plan under section 457(b).

You can get the general instructions at

Percentage limitation. The percentage limitation is an

form1098q.

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

File Form 1098-Q, Qualifying Longevity Annuity Contract

over the sum of (1) the premiums paid before that date on the

Information, if you issue any contract that is intended to be a

contract, and (2) the premiums paid on or before that date on

qualifying longevity annuity contract (QLAC). Prior to

any other contract intended to be a QLAC and that is held or

annuitization, the value of a QLAC is excluded from the

was purchased for the employee under the plan.

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.

The contract provides that distributions under the contract

For purposes of the 25% limit, an employee’s account

must commence no later than a specified annuity starting

balance on the date on which premiums for a contract are

date that is no later than the first day of the month after the

paid is the account balance as of the last valuation date

employee's 85th birthday.

preceding the date of the premium payment, adjusted as

The contract provides that, after distributions under the

follows.

contract begin, those distributions must satisfy the

The account balance is increased for contributions

requirements of 1.401(a)(9)-6 (other than the requirement

allocated to the account during the period that begins after

that annuity payments commence on or before the required

the valuation date and ends before the date the premium is

beginning date).

paid.

The contract does not make available any commutation

The account balance is decreased for distributions made

benefit, cash surrender right, or other similar feature.

from the account during that same period.

No benefits are provided under the contract after the death

Limitations on Premiums — IRAs

of the employee other than the benefits described in

Q&A-17(c).

The premiums paid with respect to the contract on a date

satisfy the limitations requirements if they do not exceed the

Jul 29, 2015

Cat. No. 67096Y

Instructions For Form 1098-Q - Qualifying Longevity Annuity Contract Information - 2016

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