IRA Contribution Reporting Requirements
By Mary Hopkins, CISP, CHSP
As you may have already guessed, this is typically the busiest time of the year for many financial institutions. During the next few months, your staff may be juggling different tasks—including preparing the 2024 IRA reporting forms and answering a higher amount of calls from clients. Read below for answers to some of our most common IRA contribution reporting questions.
When must financial institutions file Form 5498 with the IRS?
Financial institutions must report all Traditional, Roth, SEP, and SIMPLE IRA contributions to the IRS on Form 5498, IRA Contribution Information, by May 31. When the due date for filing Form 5498 falls on a Saturday, Sunday, or legal holiday, the form is considered timely filed if filed on the next business day.
When must financial institutions provide an account statement to IRA owners?
Account statements provide IRA owners with the same information that is provided to the IRS on Form 5498. Financial institutions generally must provide an account statement to Traditional, Roth, and SEP IRA owners by May 31 each year in order to report the prior year’s contribution activity. If no contributions were made, then an account statement is not required if the IRA owner received the required statement listing the prior year’s December 31 fair market value (FMV). This FMV statement must also indicate which information is being filed with the IRS. SIMPLE IRA owners have a different account statement deadline: they must receive an account statement by January 31 each year.
How are prior-year contributions reported?
IRA owners generally have until their tax return due date, not including extensions (usually April 15), to make a contribution for a particular tax year. Financial institutions must report contributions made between January 1 and April 15 for the previous year (i.e., prior-year contributions) according to the year for which the contribution is made. For example, a financial institution must report a 2024 contribution made on February 5, 2025, on a 2024 Form 5498.
Employers, however, usually have until their tax return due date, plus extensions, to make an employer SEP or SIMPLE IRA contribution. Unlike Traditional and Roth IRA contributions, financial institutions must report SEP and SIMPLE IRA contributions for the year in which the contributions are made. So if an employer makes a 2024 SEP contribution on March 7, 2025, the financial institution must report the contribution on a 2025 Form 5498, not on a 2024 Form 5498. There are no “prior-year” SEP or SIMPLE IRA contributions from a reporting standpoint.
How are Roth SEP and Roth SIMPLE IRA contributions reported?
Employers may allow employees to designate a Roth IRA as the IRA to which SEP and SIMPLE IRA contributions are made. Financial institutions must report all SEP and Roth SEP contributions on Form 5498 in Box 8, SEP contributions, and all SIMPLE and Roth SIMPLE contributions in Box 9, SIMPLE contributions. In addition, financial institutions should check both the “SEP” and “Roth IRA” boxes for Roth SEP IRAs and the “SIMPLE” and “Roth IRA” boxes in Box 7.
What are the reporting requirements when an IRA owner dies?
Financial institutions generally must complete at least two Forms 5498 for the year an IRA owner dies. The decedent’s FMV may be reported in one of two ways: by reporting either the IRA’s date-of-death FMV, or the IRA’s FMV as of December 31 of the year of death (i.e., $0). Financial institutions that use December 31 FMV must inform the executor of the decedent’s estate of its right to request a date-of-death valuation.
Each beneficiary’s share of the IRA balance at the end of the year must also be reported on separate Forms 5498. The IRS requires financial institutions to title the beneficiary’s Form 5498 using the original IRA owner’s name and the beneficiary’s name (e.g., “Jane Smith as beneficiary of John Smith”). This would also be true for a nonperson beneficiary, such as an estate, trust, or charitable organization. Form 5498 does not need to be generated for beneficiaries who have depleted their portion before the end of the year of death. If a financial institution is notified of an IRA owner’s death after the reporting deadline of May 31, no corrective reporting is required.
How must financial institutions file Form 5498 with the IRS?
The IRS provides different methods for financial organizations to file information returns, such as Form 5498. The allowed methods are filing paper forms, which the IRS scans during processing, or filing electronically.
Financial organizations that file 10 or more returns must file those returns electronically. In addition, any corrected return must be filed electronically if the original return was submitted electronically. Corrected information returns are not counted when calculating the aggregate number of information returns.
The Filing Information Returns Electronically (FIRE) system has been available for many years and allows financial institutions to upload large files. The Information Returns Intake System (IRIS) portal was recently introduced to financial institutions: it allows institutions to upload forms individually or in bulk (up to 100 forms at a time). To use either of these methods for electronic filing, a financial institution will need a separate Transmitter Control Code (TCC).
