Instructions for Forms 1099-QA and 5498-QA (2016)

Distributions from ABLE Accounts and ABLE Account Contribution Information

Section references are to the Internal Revenue Code unless otherwise noted.

2016


Instructions for
Forms 1099-QA and 5498-QA - Main Contents

Specific Instructions for Form 1099-QA

Who Must File

Any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file a Form 1099-QA, Distributions from ABLE Accounts, with the IRS on or before February 28, 2017, for each ABLE account from which any distribution was made or which was terminated during 2016. The filing may be done by either an officer or employee of the State or its agency or instrumentality having control of the qualified ABLE program, or the officer’s or employee’s designee.

Do not file Form 1099-QA for a change in the name of the designated beneficiary on an ABLE account if the new designated beneficiary is an eligible individual and a member of the family of the former designated beneficiary. For these purposes, a “member of the family” means a sibling, whether by blood or by adoption, and includes a brother, sister, stepbrother, stepsister, half-brother, or half-sister. If the new designated beneficiary is not an eligible individual for the tax year or is not a member of the family of the former beneficiary, the Form 1099-QA filed with respect to the former designated beneficiary should include in Box 1 the fair market value of the assets in the ABLE account on the date on which the change is made to the new designated beneficiary.

Statements to Recipients

If you are required to file Form 1099-QA, you also must furnish a statement to the designated beneficiary of the ABLE account reporting their distribution, and to each contributor who received a returned contribution (plus earnings) attributable to the calendar year. Furnish a copy of Form 1099-QA or an acceptable substitute statement to each recipient. Seepart M in the 2016 General Instructions for Certain Information Returns.

Truncating recipient’s identification number on payee statements.

Pursuant to Treasury Regulations section 301.6109-4, all filers of this form may truncate a recipient’s identification number (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)) on recipient statements. Truncation is not allowed on any documents the filer files with the IRS. A payer's identification number may not be truncated on any form. See part J in the 2016 General Instructions for Certain Information Returns.



Payer's Name and Federal Identification Number

For the payer's name and federal identification number, enter the name, address, and taxpayer identification number (TIN). For a program established and maintained by a state that uses the EIN of the state, enter the name of the state on the first name line and the name of the program on the second name line.

Recipient's Name and Social Security Number (SSN)

List the designated beneficiary as the recipient unless you are reporting a returned excess contribution to the contributor. In that case, list the contributor as the recipient. Enter the SSN of the applicable recipient.

Account Number

The IRS encourages you to designate an account number for all Forms 1099-QA that you file. Seepart L in the 2016 General Instructions for Certain Information Returns.

Box 1. Gross Distribution

Enter the gross distribution from the ABLE account in 2016. The gross distribution includes amounts distributed that the designated beneficiary intends to roll over to another ABLE account, but does not include program-to-program transfers. See Rollovers and program-to-program transfers, earlier. A gross distribution also includes a withdrawal of excess contributions plus earnings.

Box 2. Earnings

To determine the earnings on the gross distribution reported in box 1, see Proposed Regulations section 1.529A-3(c).

Box 3. Basis

Enter the portion of the distribution that constitutes the return of investment in the account. The amount of the gross distribution minus the earnings portion of that distribution is the portion of the distribution that constitutes the return of investment in the account. This amount is computed by subtracting the amount in box 2 from the amount in box 1.

Box 4. Program-to-Program Transfer Checkbox

Check this box if a program-to-program transfer was made from this ABLE account to another ABLE account in 2016. See Rollovers and program-to-program transfers, earlier.

Box 5.

Check the box if the ABLE account terminated in 2016.

Box 6. Other Than Designated Beneficiary Checkbox

Check this box if this form is being filed with respect to a distribution to or for the benefit of someone other than the designated beneficiary of the ABLE account, for example, a distribution of an excess contribution to the contributor.

Specific Instructions for Form 5498-QA

Who Must File

Any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file, for each ABLE account, a Form 5498-QA, ABLE Account Contribution Information, with the IRS on or before May 31, 2017. The filing may be done by either an officer or employee of the State or its agency or instrumentality having control of the qualified ABLE program, or the officer’s or employee’s designee.

Statements to Beneficiaries

If you are required to file Form 5498-QA with the IRS, you also must furnish a statement to the designated beneficiary by March 15, 2017. Furnish a copy of Form 5498-QA or an acceptable substitute statement to each beneficiary. Seepart M in the 2016 General Instructions for Certain Information Returns.

Truncating beneficiary’s identification number on payee statements.

Pursuant to Treasury Regulations section 301.6109-4, all filers of this form may truncate a beneficiary’s identification number (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)) on payee statements. Truncation is not allowed on any documents the filer files with the IRS. A issuer's identification number may not be truncated on any form. See part J in the 2016 General Instructions for Certain Information Returns.



Account Number

The IRS encourages you to designate an account number for all Forms 5498-QA that you file. Seepart L in the 2016 General Instructions for Certain Information Returns.

Box 1. ABLE Contributions

Enter the total amount of contributions made to the ABLE account in 2016, net of any excess contributions returned to the contributor. Do not include the amount of any rollover or program-to-program transfer. If no contributions were made in 2016, enter zero in this box.

Box 2. Rollover Contributions

Enter the amount of any rollover or program-to-program transfer to this ABLE account in 2016. See Rollovers and program-to-program transfers, earlier.

Box 3. Cumulative Contributions

You may but are not required to enter the amount of cumulative contributions to this ABLE account. This amount is the total of amounts contributed since the establishment of the ABLE account, including amounts contributed to an ABLE account for the same designated beneficiary that was rolled over, or directly transferred (in a program-to-program transfer), to the current ABLE account.

Box 4. Fair Market Value

Enter the FMV of the account as of December 31, 2016.

Box 5.

Check the box if the ABLE account was opened in 2016.

Box 6. Basis of Eligibility

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You must enter one code letter in box 6.

Report the basis of the designated beneficiary's eligibility using the codes below.

  • Code A—Eligibility established under IRC 529A(e)(1)(A), SSDI, Title II SSA.

  • Code B—Eligibility established under IRC 529A(e)(1)(A), SSI, Title XVI SSA.

  • Code C—Designated beneficiary is the subject of a disability certification filed with the IRS for 2016.

Box 7.

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The following information will only be used for aggregate reporting purposes as required by law.

Report only one primary code number for the type of disability for which the designated beneficiary is receiving ABLE qualifying benefits. If more than one code applies, select the most significant code.

  • Code 1—Developmental Disorders: Autistic Spectrum Disorder, Asperger’s Disorder, Developmental Delays and Learning Disabilities.

  • Code 2—Intellectual Disability: May be reported as mild, moderate, or severe intellectual disability.

  • Code 3—Psychiatric Disorders: Schizophrenia; Major depressive disorder; Post-traumatic stress disorder (PTSD); Anorexia nervosa; Attention deficit/hyperactivity disorder (AD/HD); Bipolar disorder.

  • Code 4—Nervous Disorders: Blindness, Deafness, Cerebral Palsy, Muscular Dystrophy, Spina Bifida Juvenile-onset Huntington's disease; Multiple sclerosis; Severe sensorineural hearing loss; Congenital cataracts.

  • Code 5—Congenital Anomalies: Chromosomal abnormalities, including Down Syndrome, Osteogenesis imperfecta; Xeroderma pigmentosum; Spinal muscular atrophy; Fragile X syndrome; Edwards syndrome.

  • Code 6—Respiratory Disorders: Cystic Fibrosis.

  • Code 7—Other: Includes Tetralogy of Fallot; Hypoplastic left heart syndrome; End-stage liver disease; Juvenile-onset rheumatoid arthritis; Sickle cell disease; Hemophilia; and any other disability not listed under Codes 1–6.