Instructions for Form 1098-Q (Rev. April 2025)

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Instructions for Form 1098-Q
(Rev. April 2025)

Qualifying Longevity Annuity Contract Information
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Form 1098-Q and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form1098Q.
You can get the General Instructions for Certain
Information Returns at IRS.gov/1099GeneralInstructions.

What’s New
Annual inflation adjustments to dollar limitations on
premiums. For the inflation adjusted amount, see the dollar
limitation on premiums paid for a QLAC, visit Annual
adjustment for maximum contributions and benefit limitations
for certain retirement plans (for the tax year of the return
being filed).
New regulations affect Qualifying Longevity Annuity
Contracts (QLAC). Final regulations under section 401(a)
(9) were published in TD 10001, effective date of September
17, 2024. The final regulations under section 401(a)(9) apply
for distribution calendar years beginning on or after January
1, 2025.

Reminders

In addition to these specific instructions, you should also use
the current 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.
Continuous use revision. Use these instructions for tax
year 2025 and subsequent years until a superseding revision
is issued.
Divorce guidelines. A divorce that occurs after the
purchase of a qualifying longevity annuity contract with joint
and survivor annuity benefits will not affect the permissibility
of the benefits payable under the contract, provided that
certain requirements are met. See Divorce guidelines under
Death of Employee, later.
Online fillable Copy B. To ease statement furnishing
requirements, Copy B of Form 1098-Q is fillable online in a
PDF format, available at IRS.gov/Forms1098Q. You can
complete this copy online for furnishing statements to
recipients and for retaining in your own files.
Repeal of 25% premium limit. Premiums are no longer
limited to 25% of an individual's retirement account balance.
See QLACs Purchased Before December 29, 2022, later.
Mar 12, 2025

Short free look period permitted. The right to rescind a
contract within 90 days following the date of purchase will not
cause the contract to fail to be a QLAC. See Specific
Instructions, later.

Specific Instructions

File Form 1098-Q, Qualifying Longevity Annuity Contract
Information, if you issue any contract that is intended to be a
qualifying longevity annuity contract (QLAC). Prior to
annuitization, the value of a QLAC is excluded from the
account balance that is used to determine required minimum
distributions. A QLAC is an annuity contract that is purchased
from an insurance company for an employee under any plan,
annuity, or account described in section 401(a), 403(a),
403(b), or 408 (other than a Roth IRA) or eligible
governmental plan under section 457(b), and that satisfies
each of the following requirements.
• Premiums for the contract satisfy the dollar limitation
described later under Limitation on Premiums—Plans or
Limitation on Premiums—IRAs, as applicable.
• The contract provides that distributions under the contract
must begin no later than a specified annuity starting date that
is no later than the first day of the month after the employee's
85th birthday.
• The contract provides that, after distributions under the
contract begin, those distributions must satisfy the
requirements of Regulations section 1.401(a)(9)-6 (other
than the requirement that annuity payments begin on or
before the required beginning date).
• After the required beginning date, the contract does not
make available any commutation benefit, cash surrender
right, or other similar feature (other than a right to rescind the
contract within a period not exceeding 90 days from the date
of purchase).
• No benefits are provided under the contract after the death
of the employee other than the benefits described in
paragraph (q)(3) of Regulations section 1.401(a)(9)-6.
• When the contract is issued, the contract (or a rider or
endorsement with respect to that contract) states that the
contract is intended to be a QLAC, and
• The contract is not a variable contract under section 817,
an indexed contract, or similar contract, except to the extent
provided by the Commissioner in published guidance.
An employee includes the owner of an IRA (other than a
Roth IRA), where applicable.

Limitation on Premiums—Plans

The premiums paid with respect to the contract on a date
satisfy the limitation requirement if they do not exceed the
limitation amount. For 2025, the limitation amount is
$200,000. This amount is adjusted for inflation for calendar
years beginning on or after January 1, 2025, with increases
rounded to the next lowest multiple of $10,000. For the
inflation adjusted amount, see the dollar limitation on
premiums paid for a QLAC by visiting the applicable annual
notice at Annual adjustment for maximum contributions and

Instructions for Form 1098Q (Rev. 4-2025) Catalog Number 67096Y
Department of the Treasury Internal Revenue Service www.irs.gov

benefit limitations for certain retirement plans for the tax year
of the return being filed.
For purposes of the dollar limitation on premiums, unless
the plan administrator has actual knowledge to the contrary,
the plan administrator may rely on an employee’s
representation, made in writing or such other form as outlined
in published guidance, of the amount of the premiums paid
for any other contract intended to be a QLAC, but only with
respect to premiums that are not paid under a plan, annuity,
or contract that is maintained by the employer or an entity
that is treated as a single employer with the employer under
section 414(b), (c), (m), or (o).

Limitation on Premiums—Traditional IRAs

The premiums paid with respect to the contract on a date
satisfy the limitation requirement if they do not exceed the
limitation amount. For 2025, the limitation amount is
$200,000. This amount is adjusted for inflation for calendar
years beginning on or after January 1, 2025, with increases
rounded to the next lowest multiple of $10,000. For the
inflation adjusted amount, see the dollar limitation on
premiums paid for a QLAC by visiting the applicable annual
notice at Annual adjustment for maximum contributions and
benefit limitations for certain retirement plans for the tax year
of the return being filed.
For purposes of the dollar limitation on premiums, unless
the trustee, custodian, or issuer of an IRA has actual
knowledge to the contrary, the trustee, custodian, or issuer
may rely on the IRA owner’s representation, made in writing
or in such other form as outlined in published guidance, of
the amount of premiums paid for any other contract intended
to be a QLAC and that are not paid under the IRA, and the
account balance of any other IRA. A contract that is
purchased under a Roth IRA is not treated as a contract that
is intended to be a QLAC for purposes of applying the dollar
limitation rule.

Exchange of Insurance Contract for QLAC

With respect to the dollar limitation on premiums (adjusted for
inflation), if an insurance contract is exchanged for a contract
intended to be a QLAC, the FMV of the exchanged contract is
treated as a premium paid for the QLAC. However, if an
insurance contract is surrendered for its cash value, the
surrender extinguishes all benefits and other characteristics
of the contract, and the cash is used to purchase a QLAC,
then only the cash from the surrendered contract is treated
as a premium paid for the QLAC.

QLACs Purchased Before December 29, 2022

Prior to December 29, 2022, a percentage limitation and a
lower dollar limitation was applied to QLAC premiums. If
additional premiums are paid under a contract after
December 29, 2022, those premiums are subject to the new
premium limitation described above, provided that the
premiums paid for the contract through December 28, 2022,
satisfied the premium limitations that applied prior to
December 29, 2022. The existing contract need not be
exchanged for another annuity contract on or after that date
in order for the employee to take advantage of the higher
premium limits.

QLACs Purchased After December 28, 2022

For contracts purchased or received on or after December
29, 2022, the 25% limit is repealed, and the dollar limitation
for QLACs has been adjusted for inflation.
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Consequences of Excess Premiums

If an annuity contract fails to be a QLAC solely because a
premium for a contract exceeds the limitation on premiums
described earlier, then the contract is not a QLAC beginning
on the date that premium payment is made unless the excess
premium is returned to the non-QLAC portion of the
employee’s account in accordance with Regulations section
1.401(a)(9)-6(q)(4)(i)(B). If the contract fails to be a QLAC,
then the value of the contract may not be disregarded under
Regulations section 1.401(a)(9)-5(b)(4) as of the date on
which the contract ceases to be a QLAC.
If the excess premium is returned to the non-QLAC portion
of the employee’s account by the end of the calendar year
following the calendar year in which the excess premium was
originally paid, then the contract will not be treated as
exceeding the premium limitation at any time, and the value
of the contract will not be included in the employee’s account
balance under Regulations section 1.401(a)(9)-5(b)(4).
If the excess premium is returned to the non-QLAC portion
of the employee’s account after the last valuation date for the
calendar year in which the excess premium was originally
paid, then the employee’s account balance for that calendar
year must be increased to reflect the excess premium in the
same manner as an employee’s account balance is
increased under Regulations section 1.401(a)(9)-7(b) to
reflect a rollover received after the last valuation date.
If the excess premium is returned to the non-QLAC portion
of the employee’s account, as described above, it will not be
treated as a violation of the requirement that the contract not
provide a commutation benefit.

Death of Employee
Surviving spouse is the sole beneficiary. If the employee
dies on or after the annuity starting date for the contract, the
only benefit allowed to be paid (except as provided in
Regulations section 1.401(a)(9)-6(q)(3)(v)) after the
employee's death is a life annuity payable to the surviving
spouse where the annuity payment is not in excess of 100%
of the annuity payment that is payable to the employee.
If the employee dies before the annuity starting date, the
only benefit allowed (except as provided in Regulations
section 1.401(a)(9)-6(q)(3)(v)) is a life annuity payable to the
surviving spouse where the annuity payment is not in excess
of 100% of the annuity payment that would have been
payable to the employee as of the date that benefits to the
surviving spouse start. However, the annuity is permitted to
exceed 100% of the annuity payment that would have been
payable to the employee to the extent necessary to satisfy
the requirement to provide a qualified preretirement survivor
annuity (as defined under section 417(c)(2) or ERISA section
205(e)(2)) pursuant to section 401(a)(11)(A)(ii) or ERISA
section 205(a)(2).
Any annuity payable to the surviving spouse of an
employee who dies before the annuity starting date must
start no later than the date on which the annuity payable to
the employee would have started under the contract if the
employee had not died.
Surviving spouse is not the sole beneficiary. If the
employee dies on or after the annuity starting date for the
contract, the only benefit allowed (except as provided in
Regulations section 1.401(a)(9)-6(q)(3)(v)) after death is a
life annuity payable to the designated beneficiary where the
annuity payment is not in excess of the applicable
Instructions for Form 1098-Q (Rev. 4-2025)

percentage (determined under Regulations section 1.401(a)
(9)-6(q)(3)(iii)) of the annuity payment that is payable to the
employee.
When the employee dies before the annuity starting date,
the only benefit allowed to be paid (except as provided in
Regulations section 1.401(a)(9)-6(q)(3)(v)) is a life annuity
payable to the designated beneficiary where the annuity
payment is not in excess of the applicable percentage
(determined under Regulations section 1.401(a)(9)-6(q)(3)
(iii)) of the annuity payment that would have been payable to
the employee as of the date that benefits to the designated
beneficiary start.
In any case where the employee dies before the annuity
starting date, any life annuity payable to a designated
beneficiary must begin by the last day of the calendar year
immediately following the year of the employee's death.
Multiple beneficiaries. If an employee has more than one
designated beneficiary under a QLAC, the rules in
Regulations section 1.401(a)(9)-8(a) apply for purposes of
Regulations section 1.401(a)(9)-6(q)(3)(i) and (ii).
Divorce guidelines. If there is a divorce after a purchase of
a QLAC, the payment of survivor benefits to an employee's
former spouse will not cause the contract to fail to be treated
as a QLAC, if the divorce or separation instrument, or
qualified domestic relations order under section 414(p):
• Provides that the former spouse is entitled to survivor
benefits under the contract,
• Provides that the former spouse is treated as the surviving
spouse for purposes of the contract,
• Does not modify the former spouse's status as beneficiary
entitled to survivor benefits under the contract, or
• Does not modify the former spouse as the measuring life
for survivor benefits under the contract.

Return of Premiums
In general, in lieu of a life annuity payable to a designated
beneficiary under Regulations section 1.401(a)(9)-6(q)(3)(i)
or (ii), a QLAC is permitted to provide for a benefit paid to a
beneficiary after the death of the employee in an amount
equal to the excess of the premium payments made with
respect to the QLAC over the payments already made under
the QLAC.
If a QLAC is providing or will provide a life annuity to a
surviving spouse under Regulations section 1.401(a)(9)-6(q)
(3)(i), it is also permitted to provide for a benefit paid to a
beneficiary after the death of both the employee and the
spouse in an amount equal to the excess of the premium
payments made with respect to the QLAC over the payments
already made under the QLAC.
A return of premium payment under Regulations section
1.401(a)(9)-6(q)(3)(v) must be paid no later than the end of
the calendar year following the calendar year in which the
employee dies. If the employee’s death is after the required
beginning date, the return of premium payment is treated as
a required minimum distribution (RMD) for the year in which it
is paid and is not eligible for rollover. See the Instructions for
Forms 1099-R and 5498 for further information regarding
rollovers and RMDs.
If the return of premium payment is paid after the death of
a surviving spouse who is receiving a life annuity (or after the
death of a surviving spouse who has not yet begun receiving
Instructions for Form 1098-Q (Rev. 4-2025)

a life annuity after the death of the employee), the return of
premium payment must be made no later than the end of the
calendar year following the calendar year in which the
surviving spouse dies. If the surviving spouse’s death is after
the required beginning date for the surviving spouse, then the
return of premium payment is treated as an RMD for the year
in which it is paid and is not eligible for rollover.

Who Must File

Any person who issues a contract intended to be a QLAC
that is purchased or held under any plan; annuity; account
described in section 401(a), 403(a), 403(b), or 408 (other
than a Roth IRA); or eligible governmental plan under section
457(b) must file Form 1098-Q.

Furnishing Statements to Participants

If you are required to file Form 1098-Q, you must furnish a
statement to the participant annually. For more information
about the requirement to furnish a statement to each
participant, see part M in the current General Instructions for
Certain Information Returns.

Truncating participant's TIN on payee statements.
Pursuant to Regulations section 301.6109-4, all filers of this
form may truncate a participant'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. A
filer's TIN may not be truncated on any form. See part K in
the current General Instructions for Certain Information
Returns.
Manner and time for filing. You must file Form 1098-Q with
the IRS and furnish a statement to the individual in whose
name the contract has been purchased for each calendar
year beginning with the year in which the premiums for a
contract are first paid and ending with the earlier of the year
in which the individual in whose name the contract has been
purchased reaches age 85 or dies. If the individual dies and
the sole beneficiary under the contract is the individual's
spouse (in which case the spouse's annuity would not be
required to begin until the individual would have started
benefits under the contract had the individual survived), you
must file Form 1098-Q and provide a statement annually to
the spouse until the year in which the distributions to the
spouse begin or the year in which the spouse dies, if earlier.

Issuer's Name, Address, Telephone Number,
and TIN Boxes

Enter the name, address (including street address, city or
town, state or province, country, and ZIP or foreign postal
code), and telephone number of the entity with the filing
requirement (issuer) in the box in the upper left corner. The
telephone number must allow a participant to reach a person
knowledgeable about the information reported on the form.

Account Number

The account number is required if you have multiple accounts
for a recipient for whom you are filing more than one Form
1098-Q. Additionally, the IRS encourages you to designate
an account number for all Forms 1098-Q that you file. See
part L in the current General Instructions for Certain
Information Returns.

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Plan Number, Name of Plan, and Employer
Identification Number

If the contract was purchased under a plan, enter the name of
the plan, the plan number, and the EIN of the plan sponsor.

Box 1a. Annuity Amount on Start Date

If the payments have not yet started, enter the amount of the
periodic annuity payable on the start date.

Box 1b. Annuity Start Date

If the payments have not yet started, enter the annuity
starting date on which the annuity is scheduled to start.

Box 3. Total Premiums

Enter the cumulative total amount of all premiums paid for the
contract through the end of the calendar year.

Box 4. FMV of QLAC

Enter the fair market value (FMV) of the QLAC as of the close
of the calendar year.

Boxes 5a Through 5l

Enter the amount of each premium paid for the contract and
the date of the premium payment.

Box 2. Check if Start Date May Be Accelerated

Check the box if payments have not yet started and the start
date may be accelerated.

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Instructions for Form 1098-Q (Rev. 4-2025)