The IRS has issued the draft instructions for the 2020 IRS Forms 1099-R and 5498: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. But these instructions are only drafts, and are not to be used for actual filing.
The information to be entered in the 2020 Forms 1099-R and 5498 concerns the 2019 plan year.
Form 1099-R is to be filed for each person to whom a designated distribution has been made or who has been treated as having made a distribution of $10 or more from profit-sharing or retirement plans, any IRAs, annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc.
Form 5498 is to be filed with the IRS by June 1, 2021, for each person for whom in 2020 any IRA was maintained, including a deemed IRA under Section 408(q). An IRA includes all investments under one IRA plan.
It is not necessary to file a Form 5498 for each investment under one plan; however, if a participant has established more than one IRA plan with the same trustee, a separate Form 5498 must be filed for each plan. Contributions to any IRA also must be reported on Form 5498.
What’s New
Form 1099-R has been updated concerning distributions for qualified birth and adoption. Section 113 of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 added Internal Revenue Code Section 72(t)(2)(H). This new code section provides for a distribution of up to $5,000 for a qualified birth or adoption that is exempt from the 10% early distribution tax and that can be repaid.
Form 5498 has been updated to include a new repayment code. The IRS added code “BA” for reporting a repayment of a qualified birth or adoption distribution. Section 1214 of the SECURE Act increased the required minimum distribution (RMD) age from 70½ to 72 for taxpayers turning 70½ after Dec. 31, 2019.
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