Instructions For Form 1098-Q - Qualifying Longevity Annuity Contract Information - 2014
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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
The contract provides that, after distributions under the
otherwise noted.
contract begin, those distributions must satisfy the
requirements of 1.401(a)(9)-6 (other than the requirement
Future Developments
that annuity payments commence on or before the required
For the latest information about developments related to
beginning date).
Form 1098-Q and its instructions, such as legislation enacted
The contract does not make available any commutation
after they were published, go to
benefit, cash surrender right, or other similar feature.
No benefits are provided under the contract after the death
What's New
of the employee other than the benefits described in
Q&A-17(c).
New Form 1098-Q and Instructions for Form 1098-Q.
When the contract is issued, the contract (or a rider or
Form 1098-Q, Qualifying Longevity Annuity Contract
endorsement with respect to that contract) states that the
Information, and its separate instructions, implement new
contract is intended to be a QLAC.
reporting requirements under Treasury Decision (TD) 9673.
The contract is not a variable contract under section 817,
Additionally, TD 9673 provides guidance necessary for
an indexed contract, or similar contract, except to the extent
compliance with the required minimum distribution rules
provided by the Commissioner.
under section 401(a)(9).
Reminder
An employee includes the owner of an IRA (other than a
Roth IRA), where applicable.
In addition to these specific instructions, you should also use
the 2014 General Instructions for Certain Information
Limitations on Premiums — Plans
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
Who must file (nominee/middleman).
lesser of the dollar limitation of Q&A-17(b)(2) or the
When and where to file.
percentage limitation of Q&A-17(b)(3).
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
You can get the general instructions at
governmental plan under section 457(b).
form1098q
or by calling 1-800-TAX-FORM
Percentage limitation. The percentage limitation is an
(1-800-829-3676).
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.
Jan 08, 2015
Cat. No. 67096Y
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