The Why Behind Form 5031

March 1, 2021

After you’ve completed the form to help a client withdraw funds from an annuity contract, the last thing you want to hear is a request for more paperwork.

But every disbursement requires one more form — Form 5031. We need the form, also known as a substitute IRS Form W-4P and W-9, for two reasons.

Taxpayer Identification Number
Form 5031 provides a verified taxpayer identification number. We require a TIN for any disbursement of funds, as well as for other actions. If we don't have a verified TIN, the IRS may require us to do backup withholding on the disbursement.

Tax Withholding Information
Form 5031 also provides tax withholding information. If your client doesn’t want taxes withheld from the disbursement, it’s essential that you submit Form 5031 with the distribution request.

Here are situations when the IRS requires a Form 5031:

  • Surrender
  • Partial withdrawal
  • Scheduled payments
  • Annuitization
  • TSA loans
  • Transfer/rollover/exchange
  • Change of ownership
  • Change of state residence when receiving scheduled payments
  • Death claims

We’ve made it easy for you and your clients by including Form 5031 with distribution request forms.

Have Questions?

If you have any questions about tax forms, contact our service specialists at 800.247.6888 or send us a message.

 

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