IRS Releases 2018 Form 1099-R

On July 13, 2018, the IRS released the 2018 Form 1099-R for distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc. This form is sent to participants who withdraw or transfer funds from a number of sources related to retirement and other qualified plans. It reports the gross amount of the distribution, the taxable amount reportable as income and the federal and state withholding amounts. So, each person that withdraws at least $10 from a retirement account, such as a traditional IRA, must receive a Form 1099-R.

The 2018 final forms are generally unchanged from the draft Form 1099-R updated in June 2018. Highlights of the changes include:

  • "Date of Payment" is a new box on the form, adjacent to the "Account Number" box.
    • This box shows the date of payment for reportable death benefits under Section 6050Y
    • New instructions were also added to the "Instructions for Recipients" for this box
  • Under "Instructions for Recipient," the "Qualified Plans" section is now known as "Qualified Plans and Section 403(b) plans."
  • Under "Instructions for Recipient," Box 1 instructions add language for reportable death benefits
  • Under "Instructions for Recipient," Box 5 adds language for life insurance contracts under Section 6050Y
  • Under "Instructions for Recipient," Box 7 has two new codes:
    • Code C: Reportable death benefits under Section 6050Y
    • Code M: Qualified plan loan offset

There are also two notable changes to the underlying law that impacts the form. One change is that re-characterizations of conversions cannot be made in 2018 or later. Specifically, a conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a Roth IRA, made after Dec. 31, 2017, cannot be re-characterized as having been made to a traditional IRA. The second change relates to disaster distributions that were made to employees affected by certain natural disasters that occurred in 2016 and 2017.

Employers should become familiar with the changes made to the 2018 forms. Even though 1099-R forms are routinely prepared by the fund custodian of the retirement and qualified plans, employees may have general questions involving the employer’s retirement plans or about the purpose of the form.

2018 Form 1099-R »