On February 14, 2020, the IRS released the 2020 Instructions for Forms 1099-R and 5498. The Form 1099-R reports distributions from pensions, annuities, IRAs and other retirement vehicles. The Form 5498 reports contributions to IRAs. The instructions provide specific guidelines for completing the forms.
As background, the IRS updates the form instructions annually to incorporate any recent administrative, reporting or regulatory changes. The 2020 updates to the Form 1099-R include a new section for qualified birth and adoption distributions. This addition was necessitated by a provision of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), which permits such a retirement plan distribution of up to $5,000 that is exempt from the 10% early distribution tax and can be repaid.
Correspondingly, the Form 5498 updates include a new code to report the repayment of a qualified birth and adoption distribution. Additionally, this form reflects the SECURE Act increase in the required minimum distribution age from 70.5 to 72 for taxpayers turning 70.5 after December 31, 2019.
Employers should be aware of the availability of the updated publication and most recent updates to encompass the SECURE Act provisions. For further details, employers can access the 2020 Instructions for Forms 1099-R and 5498 at the following link:
Instructions for Forms 1099-R and 5498 »