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Can the military in combat zones make late IRA contributions?

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Question: 
If our customer makes a late contribution because he or she serves in the military, how do we report?
Answer: 

There is a box on the 5498 to handle postponed or late contributions. Here are the instructions.

Box 13a. Postponed/late Contrib.

Report the amount of any postponed contribution made in 2020 for a prior year. If contributions were made for more than 1 prior year, each prior year's postponed contribution must be reported on a separate form. Report the amount of a late rollover contribution made during 2020, including rollovers that are (1) certified by participants, (2) qualified plan loan offsets, and (3) related to affected taxpayers in a federally declared disaster area. See Rev. Proc. 2016-47, 2016-37 I.R.B. 346, available at IRS.gov/irb/2016-37_IRB/ ar09.html.

If the participant also has a postponed contribution, use a separate Form 5498 to report a late rollover.

Box 13b. Year Enter the year for which the postponed contribution in box 13a was made. Leave this box blank for late rollover contributions and rollovers of qualified plan loan offset amounts.

Box 13c.

Code Enter the reason the participant made the postponed contribution. • For participants' service in a combat zone, hazardous duty area, or direct support area, enter the appropriate executive order or public law as defined under Special reporting for U.S. Armed Forces in designated combat zones, earlier.

• For participants who are “affected taxpayers,” as described in an IRS News Release relating to a federally designated disaster area, enter “FD.” (For a repayment of a qualified disaster distribution, use box 14a.)

• For participants who are making a rollover of a qualified plan loan offset amount, enter “PO.” See the discussion of qualified plan loan offsets in the second paragraph under the heading Plan Loan Offsets in the Form 1099-R instructions.

• For participants who have certified that the rollover contribution is late because of one or more of the Instructions for Forms 1099-R and 5498 (2020)

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First published on 12/27/2020

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