IRS Instruction 1099-QA and 5498-QA – Achieving a Better Life Experience (ABLE) accounts provide a tax-advantaged way for individuals with disabilities to save for qualified expenses without affecting eligibility for certain benefits. If you’re involved with ABLE programs—whether as a beneficiary, contributor, or administrator—it’s essential to understand the IRS reporting requirements. This article breaks down the IRS Instructions for Forms 1099-QA and 5498-QA, covering distributions from ABLE accounts and contribution information. We’ll explore what these forms are, who needs to file them, key deadlines, and more, based on the latest 2025 guidelines.
What Are ABLE Accounts?
An ABLE account is a savings program established under Section 529A of the Internal Revenue Code for eligible individuals with disabilities that began before age 26. These accounts allow tax-free growth and withdrawals for qualified disability expenses, such as housing, education, transportation, and health care. States or their agencies typically administer these programs, ensuring separate accounting for each beneficiary and limiting investment changes to twice per year.
Key features include:
- Contribution Limits: In 2025, the annual limit is $19,000 from all sources, plus additional amounts for employed beneficiaries up to the lesser of their compensation or the federal poverty line (e.g., $15,060 in the continental U.S.).
- Rollovers and Transfers: Funds can be rolled over or transferred between ABLE accounts under specific rules, without counting toward the annual limit.
- Excess Contributions: Programs must return excess amounts by the beneficiary’s tax return due date to avoid penalties.
Understanding these basics helps contextualize the role of Forms 1099-QA and 5498-QA in tracking account activity.
Form 1099-QA: Reporting Distributions From ABLE Accounts
Form 1099-QA is used to report gross distributions from an ABLE account during the calendar year. This includes withdrawals for qualified expenses, rollovers (but not program-to-program transfers), and returns of excess contributions.
Who Must File Form 1099-QA?
States, agencies, or instrumentalities maintaining qualified ABLE programs must file this form for each account with distributions or terminations. Filing is required even for changes in beneficiaries if the new one isn’t a family member or eligible individual—in such cases, report the account’s fair market value as a distribution.
Key Boxes on Form 1099-QA
- Box 1: Gross Distribution – Total amount distributed, including those intended for rollovers.
- Box 2: Earnings – Taxable earnings portion, calculated per IRS regulations.
- Box 3: Basis – Return of investment (gross distribution minus earnings).
- Box 4: Program-to-Program Transfer – Checked if applicable.
- Box 5: ABLE Account Terminated – Checked for terminations.
- Box 6: Other Than Designated Beneficiary – Checked for distributions to non-beneficiaries, like excess returns to contributors.
Filing Deadlines and Statements
File Form 1099-QA with the IRS by February 28, 2026 (not extended for leap years). Furnish statements to beneficiaries or contributors by January 31, 2026. Electronic filing is required if you have 10 or more returns (aggregated across all forms).
Do not file for beneficiary changes within the family.
Form 5498-QA: Reporting ABLE Account Contributions
Form 5498-QA reports contributions, rollovers, and the fair market value of ABLE accounts. It helps the IRS track compliance with contribution limits and program rules.
Who Must File Form 5498-QA?
The same entities as for Form 1099-QA must file this for every ABLE account, even if no contributions were made (enter zero in Box 1).
Key Boxes on Form 5498-QA
- Box 1: ABLE Contributions – Total cash contributions, 529 QTP rollovers, and QTP-to-ABLE transfers (exclude returned excesses).
- Box 2: ABLE to ABLE Rollovers – Amounts from other ABLE accounts (exclude 529 transfers).
Additional details like the account’s fair market value may be required under general instructions.
Filing Deadlines and Statements
File with the IRS by June 1, 2026. Furnish statements to beneficiaries by March 15, 2026 (or the next business day if on a weekend/holiday). Electronic filing thresholds apply.
General Filing Requirements and Penalties
Follow the 2025 General Instructions for Certain Information Returns for details on electronic reporting, corrections, TIN truncation, and backup withholding. Penalties apply for late or incorrect filings, ranging from $60 to $310 per form, depending on timing and intent.
Use continuous-use forms, available as online fillable PDFs on IRS.gov. For low-volume filers, this simplifies compliance.
Recent Updates and Reminders for 2025
- E-Filing Threshold: Reduced to 10 returns, effective since 2024.
- Contribution Increases: Adjusted for inflation and poverty guidelines.
- No Reporting for Certain Changes: Skip Form 1099-QA for family beneficiary switches.
- Draft to Final: The IRS released draft instructions in December 2025, with no major changes noted in final versions.
Stay updated via IRS.gov for any future developments, especially post-legislation changes.
Why These Forms Matter for Tax Compliance
Forms 1099-QA and 5498-QA ensure accurate reporting of ABLE account activity, helping beneficiaries track taxable distributions and contributions. Non-qualified withdrawals may be subject to income tax and a 10% penalty, so proper documentation is crucial.
If you’re a beneficiary, review these forms when preparing your tax return. Administrators should prioritize timely filing to avoid penalties. For personalized advice, consult a tax professional or visit IRS.gov for official resources.
This guide is based on the most current IRS instructions as of 2025. Always verify with the latest publications for your specific situation.