Following the release of updated Instructions for Form 1099-R/5498 for tax year 2025, the IRS has issued two additional updates modifying reporting requirements.
The updated Instructions for Form 1099-R/5498 for tax year 2025 introduced a requirement for annuity issuers to report year-end actuarial values of annuitized contracts in box 8 when payments occurred during the year. The post-update provides relief to issuers of commercial annuity contracts completing Form 1099-R, noting that they are not required to enter this amount and can disregard the instructions regarding this requirement.
The 2025 instructions also introduced code Y to identify qualified charitable distributions (QCDs), to be used alongside distribution-type codes such as Code 7 for normal distributions, Code 4 for inherited accounts, and Code K for assets without readily available fair market value. The new update clarifies that entering code Y in box 7 is optional and filers may choose not to do so.
To review the IRS announcement regarding reporting relief for commercial annuity contract filers in greater detail, click here.
To review the IRS announcement regarding Code Y in greater detail, click here.
