Overview
Individual retirement account (IRA) owners have deadlines by which many IRA-related “actions” must be completed. Furthermore, IRA custodians/trustees have deadlines to complete reporting. Transactions subject to a specific deadline include making an IRA regular contribution, removal of an excess or unwanted regular contribution, recharacterization of a prior year regular contribution, and completing a rollover or conversion after taking a distribution. A federally declared disaster area designation can provide relief (i.e., an extended deadline) to affected taxpayers, allowing them to complete certain transactions by a later specified date. Extending the deadline by which an IRA custodian or trustee must file certain reports, such as Internal Revenue Service (IRS) Form 5498, IRA Contribution Information, is also included in the relief provided by the IRS. For more information see the IRS 2024 Instructions for Forms 1099-R and 5498 or the Individual Retirement Accounts: 2024 contribution reporting on IRS Form 5498 article on Expert Insights.
Examples of extended deadline relief
The deadline for an IRA owner to make an IRA regular contribution is his/her tax-filing due date, excluding extensions. For 2024 this deadline was April 15, 2025. The deadline by which an IRA custodian or trustee is required to file its 2024 Form 5498s with the IRS and provide a copy to IRA owners and beneficiaries is May 31, 2025.
Example 1: Barbara, age 48, wanted to make a $7,000 traditional IRA regular contribution for tax year 2024. Under normal circumstances, Barbara would have been required to make this contribution by April 15, 2025, her 2024 tax filing deadline. However, because Barbara is an affected resident of a county in Arkansas that was declared a disaster area due to severe storms, tornadoes, and flooding beginning on April 2, 2025, she has until November 3, 2025, to make her 2024 IRA contribution.
Example 2: Barbara, from example 1, has an IRA with ABC Bank. Utilizing the disaster declaration extension, Barbara contributes $7,000 for 2024 to her traditional IRA with ABC Bank on June 14, 2025. How will ABC Bank report this contribution? ABC Bank is an IRA custodian and located in an Arkansas county that was declared a disaster area due to severe storms, tornadoes, and flooding beginning on April 2, 2025. As a result, ABC Bank has an extended deadline of November 3, 2025, to file its 2024 IRS Form 5498s with the IRS and provide copies to IRA owners and beneficiaries. However, ABC Bank will only report IRA regular contributions for 2024 made by IRA owners through April 15, 2025, in addition to other various contributions (e.g., rollovers, conversions, etc.) made to IRAs during 2024. Because the contribution Barbara made on June 14, 2025, was for 2024 but was made using a disaster declaration extension, it is considered a postponed contribution for 2024 and will not be reported on a 2024 IRS Form 5498. ABC will collect deposit documentation from Barbara indicating the deposit type as a postponed contribution, the tax year for which it was deposited (2024), and a reason code of why the contribution was postponed. In this case the reason code is ‘FD’ due to the postponed contribution relating to a federally designated disaster area. This postponed IRA regular contribution will be reported in boxes 13a, b, and c of Barbara’s 2025 IRS Form 5498.
Example of rollover relief
Susan took $40,000 from her IRA on January 4, 2025. She was planning to roll the distribution back into an IRA within the 60-day time-period (i.e., by March 4, 2025). As an affected resident of a county in West Virginia that was declared a federal designated disaster area due to severe storms beginning on February 15, 2025, Susan has through November 3, 2025 to complete a rollover.
Conclusion
IRA custodians and trustees are not responsible for determining if someone is an affected taxpayer under disaster relief. However, with the many disaster declarations already made this year, understanding the rules and requirements to properly document and report various related transactions is a primary responsibility for IRA custodians and trustees.
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