Take The Stress Out of IRA Reporting Changes
From major IRS technology shifts to new tax reporting requirements, financial organizations are navigating more complexity than ever. At Ascensus, we recognize that compliance obligations shouldn’t distract you from strategic growth, and that’s why our Fully-Administered Program for IRAs and HSAs is designed to take the reporting stress off your team and ensure you remain aligned with IRS requirements.
IRS is Sunsetting FIRE and Moving to IRIS
One of the most significant infrastructure changes affecting retirement and health savings reporting is the sunsetting of the IRS’ FIRE system. The IRS has announced that the Filing Information Returns Electronically (FIRE) platform, which has historically been used to submit the 1099-series and other information returns, including Forms 1099-R and 5498, will be phased out with 2025 tax reporting and replaced by the Information Returns Intake System (IRIS) for the 2026 tax reporting season.
This transition means that organizations filing electronically must adapt to the IRIS submission formats, which employ updated data structures and validation rules. For many organizations, building and testing these capabilities internally can be time-consuming and technically demanding. That’s where Ascensus steps in.
Ascensus has already begun preparing for the IRIS transition and will ensure that the information return files we generate and submit on behalf of our clients meet IRS formatting requirements for tax year 2026 and beyond. As part of our Fully-Administered Program, your team doesn’t have to build, test, or troubleshoot IRIS submissions, we can handle it as part of a comprehensive compliance solution, giving you confidence and peace of mind as IRS systems evolve.
New QCD Reporting Requirements (Code Y is Here)
In addition to system changes at the IRS, IRA reporting itself is becoming more nuanced. In 2025 the IRS introduced code Y, Qualified charitable distribution (QCD) claimed by taxpayer under section 408(d)(8), which should be used with either codes 7, 4, or K in Box 7 of Form 1099-R. The new code requires financial organizations to identify QCDs taken from Traditional and inherited IRAs, as well as from SEP and SIMPLE IRAs that are not “ongoing”.
While the IRS made Code Y optional for 2025 reporting, organizations should be prepared for mandatory use beginning with tax year 2026 and beyond. Ascensus has already implemented Code Y support in our internal reporting systems, ensuring that QCDs are accurately reflected in Form 1099-R filings before the IRS requires it. That kind of proactive compliance readiness is characteristic of the Fully-Administered Program and can help you avoid last-minute scrambling or costly errors.
Compliance Isn’t Just About Being Accurate, It’s About Being Strategic
Major reporting errors can lead to penalties and headaches. At Ascensus, our compliance technology identifies potential tax reporting errors and resolve them for our clients, helping them avoid IRS penalties and reducing administrative burdens.
But accurate reporting is just the beginning. Today’s financial organizations need operational and strategic alignment across multiple account types, including IRAs, HSAs, and ESAs.
Ascensus’ Fully-Administered Program supports
accurate year-end tax reporting and form production, with built-in compliance logic to catch common mistakes;
FIRE-to-IRIS transition support, including file formatting, IRS application and submission handling; and
system updates for existing and new reporting codes, such as the new code Y.
Ascensus is a Partner for Strategic Growth
To support financial organizations navigating this expanding universe of compliance and business opportunities, our team created a new whitepaper outlining how Ascensus can be a strategic growth partner, not simply a vendor. Whether you’re managing IRA, HSA, or Coverdell ESA accounts, the whitepaper will help you understand how
robust administration supports client retention and satisfaction,
outsourcing can sharpen your competitive edge, and
your organization can cut costs without cutting corners.
If you haven’t yet reviewed this whitepaper, you can find it here.
In a time of change, compliance doesn’t have to be chaotic. With Ascensus’ Fully-Administered Program, innovative reporting tools, and strategic partnership focus, you gain a trusted ally ready to help navigate IRS system transitions, reporting rule updates, and operational complexities so you can keep your focus on clients and growth.
If you’d like to learn more about our Fully-Administered Program, email us at salessupport@ascensus.com.
