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?
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 on How to E-File IRS Form 1098-Q with Tax2efile
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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Frequently Ask Questions
Find answers to commonly asked questions about our products and services.
Form 1098-Q is used to report an issued qualified longevity annuity contract (QLAC). Prior to annuitization, the value of a QLAC is excluded from the account balance that is used to determine required minimum distributions. A QLAC is an annuity contract that is purchased from an insurance company for an employee under any plan, annuity, or account described in section 401(a), 403(a), 403(b), or 408 (other than a Roth IRA) or eligible governmental plan
Details required to file Form 1098-Q are Issuers & Participants Name, Address. TINs, Annuity amount/date, Total premiums, FMV of QLAC.
Yes, Tax2efile offers a bulk upload feature that allows the user to upload all of the payers to an excel sheet for a faster process.
Tax2efile allows you to correct a mistake to the payers’ information for TINs, Names & amounts.
Yes, Tax2efile offers printing and mailing service! Our dedicated team will print and mail out each form you filed.
Yes, Form 1098-Q may be subject to late filing penalties if filed after the due date. It’s important to file on time to avoid potential penalties.
Yes, Tax2efile provides options for correcting or amending previously filed Form 1098-Q, ensuring accurate reporting and compliance with IRS regulations.
Using our fast electronic service, you can complete your filing within 5 minutes.
To file Form 1098-Q for a single return the filing fee is $3.25.
The IRS requires Form 1098-Q to be submitted by February 28 through the mail and by March 31 if you file the form electronically however, recipients’ copy should be mailed by January 31.
Failure to file the 1098 form by the deadline may result in IRS penalties. The penalty can be from $60 per 1098 Form, the maximum penalty can be up to $630,500. If you submit Form more than 31 days to before August 1, the penalty increases to $120 per 1098 Form and maximum penalty up to $1,891,500. If you file after August 1, the penalty can be from $310 per 1098 Form and maximum penalty up to $3,783,000. Additionally, there are penalties for failure to furnish the payee statement.
The required details to file Form 1098-Q include the name, address, and taxpayer identification number of the account holder receiving the distribution, as well as the amount of the distribution.
Form 1098-Q is used to report distributions from qualified education programs, such as Coverdell Education Savings Accounts (ESAs).
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