The American Bankers Association today submitted a comment letter to the Internal Revenue Service requesting that the agency delay by 12 months the effective date of its new “code Y” reporting requirement on Forms 1099-R and 5498 for qualified charitable distributions made by individual retirement account owners.
According to the association, for bank IRA trustees and custodians, implementing the new code Y for the current tax year would involve considerable time, costs and resources in updating systems and in revising the terms of the bank-IRA customer agreement. Moreover, since the IRS draft instructions did not emerge until March 15, any QCDs made prior to that date for 2025 would have to be manually identified, tracked down and recoded, exposing the bank to increased incidence of error, omission or incompletion of Form 1099-R.
The letter said that the delay would allow bank IRA trustees and custodians the transition period necessary to incorporate code Y into their systems, customer agreements and reporting processes.
