5498-QA, ABLE Account Contribution Information

2017

Instructions for
Forms 1099-QA and 5498-QA

Department of the Treasury
Internal Revenue Service

Distributions From ABLE Accounts and ABLE Account Contribution Information
Section references are to the Internal Revenue Code
unless otherwise noted.

Separate accounting. A qualified ABLE program must
provide separate accounting for each designated
beneficiary.

Future Developments

For the latest information about developments related to
Forms 1099-QA and 5498-QA and their instructions, such
as legislation enacted after they were published, go to
www.irs.gov/form1099qa or www.irs.gov/form5498qa.

Reminder

Pledging of interest as security. A program is not
treated as a qualified ABLE program if it allows any
interest in the program or any portion of it to be used as
security for a loan.

In addition, you should also use the 2017 General
Instructions for Certain Information Returns. Those
general instructions include information about the
following topics.
Who must file (nominee/middleman).
When and where to file.
Electronic reporting requirements.
Corrected and void returns.
Statements to recipients.
Taxpayer identification numbers.
Backup withholding.
Penalties.
Other general topics.

Excess aggregate contributions. A qualified ABLE
program must provide adequate safeguards to prevent
aggregate contributions on behalf of a designated
beneficiary in excess of the limit established by the State
under the State's qualified tuition program. Aggregate
contributions include contributions to any prior ABLE
account maintained by any qualified ABLE program for
the same designated beneficiary or any prior designated
beneficiary.

You can get the general instructions at General
Instructions for Certain Information Returns or
www.irs.gov/form1099qa or www.irs.gov/form5498qa.

Qualified ABLE Program

A qualified ABLE program is a program established and
maintained by a State, or agency, or instrumentality of a
State:
Under which an ABLE account may be established for a
blind or disabled individual whose blindness or disability
occurred before age 26 (an “eligible individual”), who is
the owner and designated beneficiary of the account;
Which permits contributions to such ABLE account to
pay for the qualified disability expenses of the account’s
designated beneficiary;
Which limits a designated beneficiary to one ABLE
account; and
That meets the other requirements of section 529A.
Cash contributions. A program is not treated as a
qualified ABLE program unless it provides that no
contribution will be accepted:
unless it is in cash; or
except in the case of a rollover or program-to-program
transfer, if such contribution would result in contributions
from all contributors to the ABLE account for the tax year
exceeding $14,000 for the calendar year in which the tax
year begins (an “excess contribution”).

Sep 16, 2016

Limited investment direction. A qualified ABLE
program provides that a designated beneficiary may
directly or indirectly direct the investment of any
contributions to the program (or any earnings on it) no
more than 2 times in any calendar year.

Return of excess contributions and excess aggregate contributions. A qualified ABLE program must
return an excess contribution or excess aggregate
contribution (including all net income attributable to that
excess contribution or excess aggregate contribution) to
the person who made the contribution on or before the
due date (including extensions) for the federal income tax
return of the designated beneficiary for the tax year in
which the excess contribution or excess aggregate
contribution was made.
Rollovers and program-to-program transfers. For
purposes of these instructions, a “rollover” means a
contribution to an ABLE account of the designated
beneficiary (or of an eligible individual who is a member of
the family of the designated beneficiary) of all or a portion
of an amount withdrawn from the designated beneficiary’s
ABLE account, provided the contribution is made within
60 days of the date of the withdrawal and, in the case of a
rollover to the designated beneficiary’s ABLE account, no
rollover has been made to an ABLE account of the
designated beneficiary within the prior 12 months.
A “program-to-program transfer” means the direct
transfer of the entire balance of an ABLE account to an
ABLE account of the same designated beneficiary in
which the transferor ABLE account is closed upon
completion of the transfer, or of part or all of the balance
to an ABLE account of another eligible individual who is a
member of the family of the former designated
beneficiary, without any intervening distribution or
deemed distribution to the designated beneficiary.

Cat. No. 67557E

Recipient's Name and Social Security Number
(SSN)

Specific Instructions for Form
1099-QA

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.

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, 2018, for each ABLE
account from which any distribution was made or which
was terminated during 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.

Account Number

The IRS encourages you to designate an account number
for all Forms 1099-QA that you file. See part L in the 2017
General Instructions for Certain Information Returns.

Box 1. Gross Distribution

Enter the gross distribution from the ABLE account in
2017. 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. On a Form
1099-QA for a contributor, enter into Box 1 the amount(s)
of excess contributions withdrawn plus earnings thereon.

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.

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.

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 distributions, 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, but only with regard to the amounts paid to
that recipient. See part M in the 2017 General Instructions
for Certain Information Returns.

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
2017. See Rollovers and program-to-program transfers,
earlier.

Truncating recipient’s taxpayer identification number
on payee statements. Pursuant to Regulations section
301.6109-4, all filers of this form may truncate a
recipient’s taxpayer 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 taxpayer identification
number may not be truncated on any form. See part J in
the 2017 General Instructions for Certain Information
Returns.

Box 5.

Check the box if the ABLE account terminated in 2017.

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

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.

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, 2018. The filing may be done by either an officer or
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Instructions for Forms 1099-QA and 5498-QA (2017)

Box 4. Fair Market Value

employee of the State or its agency or instrumentality
having control of the qualified ABLE program, or the
officer’s or employee’s designee.

Enter the FMV of the account as of December 31, 2017.

Box 5.

Statements to Beneficiaries

Check the box if the ABLE account was opened in 2017.

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, 2018. Furnish a copy of Form
5498-QA or an acceptable substitute statement to each
beneficiary. See part M in the 2017 General Instructions
for Certain Information Returns.

Box 6. Basis of Eligibility

!

CAUTION

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 2017.

Truncating beneficiary’s taxpayer identification
number on payee statements. Pursuant to Regulations
section 301.6109-4, all filers of this form may truncate a
beneficiary’s taxpayer 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. An issuer's taxpayer
identification number may not be truncated on any form.
See part J in the 2017 General Instructions for Certain
Information Returns.

Box 7.

!

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

CAUTION

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.

Account Number

The IRS encourages you to designate an account number
for all Forms 5498-QA that you file. See part L in the 2017
General Instructions for Certain Information Returns.

Box 1. ABLE Contributions

Enter the total amount of contributions made to the ABLE
account in 2017. Total contributions do not include any
excess contributions returned in 2017. Do not include the
amount of any rollover or program-to-program transfer. If
no contributions were made in 2017, 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 2017. 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.

Instructions for Forms 1099-QA and 5498-QA (2017)

You must enter one code letter in box 6.

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