Last Piece of the Puzzle: IRS General Instructions Complete Guidance for Filing 2022 Forms 1099-R and 5498

The 2022 Forms 1099-R and 5498 and their combined instructions became available in 2021, but the general instructions for filing those (and certain other) information returns have now also been released, completing the guidance needed for filing. Form 1099-R is used to report designated distributions from retirement plans, annuities, IRAs, and other sources. Form 5498 is used to report contributions to IRAs (including deemed IRAs within a qualified plan), and certain other IRA-related information, including fair market value and required minimum distributions. The 2022 versions of these forms will be filed with the IRS and furnished to distribution recipients and IRA owners and beneficiaries in 2023 for events occurring in 2022. Changes for 2022 include—

• Forms 1099-R and 5498. Changes are limited to updating year references and removing the year-specific delivery and filing deadlines. Instead, the forms now refer users to the General Instructions for due date information.

• Instructions for Forms 1099-R and 5498. There are a few changes, only some of which may affect 401(k) plan sponsors and plan administrators.

  • Escheatments. Payments by qualified plans to state unclaimed property funds under escheat laws must now be reported on Form 1099-R. In Revenue Ruling 2020-24, the IRS announced a limited nonenforcement policy for payors and plan administrators who did not meet the withholding and reporting requirements described in the ruling (see our Checkpoint article), but that relief has expired.
  • Form W-4R. Payers are reminded that, beginning in 2022, Form W-4R should be provided to recipients of nonperiodic payments and eligible rollover distributions so they can request additional withholding or claim exemption from withholding. [EBIA Comment: These instructions mention only Form W-4R, but the IRS website states that during 2022 payers may use either the 2021 Form W-4P or the redesigned 2022 Form W-4P (for periodic payments) and new Form W-4R (for nonperiodic payments). The 2021 Form W-4P should not be used after December 31, 2022.]
  • Disaster-Related Distributions. A new instruction explains how to report disaster-related distributions.

• General Instructions. Dates and applicable penalty amounts have been updated. In addition, payers are alerted to several coming changes.

  • Electronic Filing Threshold. The instructions note that the IRS has been authorized to lower the 250-return threshold for electronic filing of 2022 information returns, but final regulations have not been issued. (Regulations were proposed in July 2021 (see our Checkpoint article).) The threshold remains unchanged unless final regulations are issued that apply to 2022.
  • Filing Portal. An internet portal for preparation, filing, and distribution of all Forms 1099 should be available starting in 2023.
  • Continuous Use Forms. Form 1098 and certain 1099-series forms have been converted to continuous use and will, going forward, be revised only as needed. Form 1099-R, however, will continue to be updated annually.

EBIA Comment: Qualified plan distributions of $10 or more in 2022 must be reported to the IRS on this version of Form 1099-R. The deadline for providing the 2022 Form 1099-R to plan participants and beneficiaries is January 31, 2023. Copy A must be filed with the IRS by February 28, 2023, for scannable paper filings, and by March 31, 2023, for electronic filings. The 2022 Form 5498 generally must be filed and provided by May 31, 2023, but some information (regarding fair market value and required minimum distributions) must be furnished by January 31, 2023. Copy A filings on paper must be prepared using the official printed versions of the forms obtained from the IRS. Attempts to file nonscannable photocopies of the forms may result in penalties. For more information, see EBIA’s 401(k) Plans manual at Sections VIII.G (“After-Tax and Deemed IRA Contributions”) and XIV.R (“Reporting Distributions on Form 1099-R”).

Contributing Editors: EBIA Staff.