5498-QA -- ABLE Account Contribution Information

2021

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.

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
IRS.gov/Form1099QA or IRS.gov/Form5498QA.

What's New
Contributions. Contributions (including any
contributions from a section 529 program, but not
including contributions of the designated beneficiary’s
compensation income made under section 529A(b)(2)(B))
made to your ABLE account in 2021 can’t exceed
$15,000. Also, see Contributions, later, for more
information.

Reminders

In addition, you should also use the 2021 General
Instructions for Certain Information Returns. Those
general instructions include information about the
following topics.
• Who must file.
• When and where to file.
• Electronic reporting.
• Corrected and void returns.
• Statements to recipients.
• Taxpayer identification numbers (TINs).
• Backup withholding.
• Penalties.
• Other general topics.
You can get the General Instructions for Certain
Information Returns at IRS.gov/1099GeneralInstructions
or go to IRS.gov/Form1099QA or IRS.gov/Form5498QA.
Online fillable forms. Due to the very low volume of
paper Forms 1099-QA and 5498-QA received and
processed by the IRS each year, these forms have been
converted to online fillable PDFs. You may fill out these
forms, available at IRS.gov/Form1099QA and at IRS.gov/
Form5498QA, and send Copy B to each recipient.

!

Electronic reporting. Forms 1099-QA and
5498-QA can only be filed on paper.

CAUTION

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
Nov 25, 2020

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.
Contributions. A program is not treated as a qualified
ABLE program unless it provides that no contribution will
be accepted:
1. Unless it is in cash; or
2. Except in the case of a rollover or
program-to-program transfer from an ABLE account, if
such contribution would result in aggregate contributions
from all contributors to the ABLE account for the tax year
exceeding the sum of:
a. $15,000 (in 2021), plus
b. In the case of additional contributions made by
certain employed ABLE account designated beneficiaries,
an amount up to the lesser of:
i. The designated beneficiary’s compensation for the
tax year, or
ii. The poverty line amount for a one-person
household (Community Services Block Grant Act (42
U.S.C. 9902)). For 2021, the allowable amount is:
$12,760 in the continental United States,
$15,950 in Alaska, and
$14,680 in Hawaii.
Note. The amount is based on P.L. 115-97, section
11024(a)(1)(B)(ii)(II), which allows for “an amount equal to
the poverty line for a one-person household, as
determined for the calendar year preceding the calendar
year in which the tax year begins.”
The contribution limit is determined using the
poverty guideline applicable in the state of the
CAUTION designated beneficiary’s residence, rather than
the guideline applicable in the state in which the
designated beneficiary’s ABLE account is established, or
elsewhere.

!

An employed designated beneficiary is not eligible for
the increased contribution limit for the tax year if any
contribution is made on behalf of the employee to a
defined contribution plan (within the meaning of section
414(i)), a section 403(b) plan, or a section 457(b) plan.
The designated beneficiary is responsible for maintaining
adequate records to document the eligibility for increased
contributions. See Notice 2018-62 at IRS.gov/irb/
2018-34_IRB#NOT-2018-62.

Cat. No. 67557E

from which any distribution was made or which was
terminated during 2021. 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.

Separate accounting. A qualified ABLE program must
provide separate accounting for each designated
beneficiary.
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 two times in any calendar year.

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
(FMV) of the assets in the ABLE account on the date on
which the change is made to the new designated
beneficiary.

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.
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 (QTP).
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.

Statements to Recipients

If you are required to file Form 1099-QA, you must also
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 2021 General Instructions
for Certain Information Returns.

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.

Truncating recipient’s TIN on payee statements.
Pursuant to Regulations section 301.6109-4, all filers of
this form may truncate a recipient’s TIN (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 TIN may not be
truncated on any form. See part J in the 2021 General
Instructions for Certain Information Returns.

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.

Payer's Name and TIN

Enter the name, address, and TIN of the payer. 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 TIN

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 TIN of the applicable recipient.

Specific Instructions for Form
1099-QA

Account Number

The IRS encourages you to designate an account number
for all Forms 1099-QA that you file. See part L in the 2021
General Instructions for Certain Information Returns.

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 March 1, 2022, for each ABLE account
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Instructions for Forms 1099-QA and 5498-QA (2021)

Box 1. Gross Distribution

Truncating beneficiary’s TIN on payee statements.
Pursuant to Regulations section 301.6109-4, all filers of
this form may truncate a beneficiary’s TIN (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 TIN may not be
truncated on any form. See part J in the 2021 General
Instructions for Certain Information Returns.

Enter the gross distribution from the ABLE account in
2021. 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 in box 1 the amount(s) of
excess contributions returned plus earnings thereon.

Box 2. Earnings

Account Number

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

The IRS encourages you to designate an account number
for all Forms 5498-QA that you file. See part L in the 2021
General Instructions for Certain Information Returns.

Box 3. Basis

Box 1. ABLE Contributions

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.

Enter the total amount of contributions made to the ABLE
account in 2021. Include all cash contributions, QTP to
ABLE rollovers, and QTP to ABLE program-to-program
transfers. Total contributions do not include any excess
contributions returned in 2021. Do not include the amount
of any rollover or program-to-program transfer. If no
contributions were made in 2021, enter zero in this box.

Box 4. Program-to-Program Transfer Checkbox

Box 2. ABLE to ABLE Rollovers

Check this box if a program-to-program transfer was
made from this ABLE account to another ABLE account in
2021. See Rollovers and program-to-program transfers,
earlier.

Enter the amount of any rollover or program-to-program
transfer to this ABLE account from another ABLE account
in 2021. Do not include any contributions from a section
529 program. See Rollovers and program-to-program
transfers, earlier.

Box 5. ABLE Account Terminated Checkbox

Check the box if the ABLE account terminated in 2021.

Box 3. Cumulative Contributions

Box 6. Other Than Designated Beneficiary
Checkbox

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.

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

Box 4. Fair Market Value

Enter the fair market value of the account as of December
31, 2021.

Who Must File

Box 5. Account Opened Checkbox

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, 2022. 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.

Check the box if the ABLE account was opened in 2021.

Box 6. Basis of Eligibility

!

CAUTION

Report the basis of the designated beneficiary's eligibility
using the codes below.
• Code A—Eligibility established under section 529A(e)
(1)(A), SSDI, Title II SSA.
• Code B—Eligibility established under section 529A(e)
(1)(A), SSI, Title XVI SSA.
• Code C—Designated beneficiary is the subject of a
disability certification filed with the IRS for 2021.

Statements to Beneficiaries

If you are required to file Form 5498-QA with the IRS, you
must also furnish a statement to the designated
beneficiary by March 15, 2022. Furnish a copy of Form
5498-QA or an acceptable substitute statement to each
beneficiary. See part M in the 2021 General Instructions
for Certain Information Returns.
Instructions for Forms 1099-QA and 5498-QA (2021)

You must enter one code letter in box 6.

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• 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 through 6.

Box 7. Type of Disability Code

!

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.

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Instructions for Forms 1099-QA and 5498-QA (2021)