Fillable Form 1099-QA (2023)

The Ultimate Guide to Filling Out IRS Form 1099-QA for ABLE Account Distributions

The IRS Form 1099-QA is a critical tax document for those managing Achieving a Better Life Experience (ABLE) accounts. It details distributions from these accounts to assist in accurate tax reporting. Whether you're a state agency or an individual overseeing an ABLE account, understanding how to fill out and submit this form correctly is paramount.

What is Form 1099-QA?

The 1099-QA is a tax form used by states or their agencies to report distributions made from ABLE accounts during a calendar year. ABLE accounts offer tax advantages for individuals with disabilities, and Form 1099 ensures the IRS tracks withdrawals for proper tax treatment.

How to Fill Out Form 1099-QA

Filling out the 1099QA requires attention to detail to ensure accurate reporting. Follow these step-by-step instructions:

1. Payer’s Information: In the designated section, enter the name, address, and Tax Identification Number (TIN) of the managing state agency or program. If the program is operated by the state, include the state's name and the program name on separate lines.
2. Recipient's Name and TIN: Identify the ABLE account's designated beneficiary as the recipient. If reporting a returned contribution, list the contributor instead. Accurately input their TIN, ensuring correctness.
3. Account Number: Assign an account number for the form. This organization tool is recommended for keeping track of filed forms.
4. Box 1 – Gross Distribution: Enter the total distribution amount from the ABLE account within the year. This includes rollovers intended by the beneficiary to another ABLE account but excludes program-to-program transfers.
5. Box 2 – Earnings: Calculate the earnings on the reported gross distribution using the methods outlined in Regulations section 1.529A-3(c).
6. Box 3 – Basis: This represents the investment return portion of the distribution. Subtract the earnings (Box 2) from the gross distribution (Box 1).
7. Boxes 4 & 5: If applicable, indicate whether a program-to-program transfer occurred or if the ABLE account was terminated during the year.
8. Box 6: Check this box if the distribution benefits someone other than the designated beneficiary, such as a returned contribution to the contributor.

Submission Deadlines and Sending

States must submit Form 1099 QA to the IRS by March 1st of the year following the distribution. Additionally, they are required to provide a copy detailing the amounts paid to the designated beneficiary or contributor, as applicable.