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General
If you’re responsible for reporting distributions from a Qualified Tuition Program (QTP), also known as a 529 Plan, you must file IRS Form 1098-Q. This form helps the IRS track educational distributions and ensures transparency for both account holders and beneficiaries. Filing on time is essential to avoid penalties and remain in compliance with IRS rules.
Table of Contents
What is IRS Form 1098-Q?
IRS Form 1098-Q is an information return used to report details about Qualifying Longevity Annuity Contracts (QLACs) purchased from qualified retirement accounts, such as IRAs and 401(k) plans.
This form is filed by annuity providers or insurance companies and is provided to the contract holder (participant) to help ensure compliance with retirement distribution rules. The form tracks QLAC purchases and verifies that the investment amount is correctly excluded from Required Minimum Distributions (RMDs) until annuity payments begin, typically at age 85.
Filing Deadlines of Form 1098-Q
| Filing type | Deadline Date |
|---|---|
| Paper filing | February 28, 2025 |
| Electronic filing | February 28, 2025 |
| Sending Participant Copies | January 31, 2025 |
Penalties
| Days Late | Penalty per Form | Maximum Penalty per Year | Maximum Penalty for Small Businesses |
|---|---|---|---|
| Filed within 30 days after due date | $60 | $683,000 | $239,000 |
| Filed more than 30 days late but by August 1 | $130 | $2,049,000 | $683,000 |
| International Disregard | $680 | No maximum limit | No maximum limit |
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