Form 1099-R

[Guest ak]

VEBA owns an annuity contract and receives payments thereunder. Do those payments have to be reported on Form 1099-R even though they aren't generally subject to tax, i.e., VEBA is generally tax-exempt.

[Ron Snyder]

The payer has to report interest paid to VEBAs as well as others. Whether the VEBA is taxable depends on what the investment represents. Although the trust is generally tax-exempt, accumulations to provide future medical benefits are taxable as unrelated business taxable income (UBTI), and are subject to UBIT (except for collectively-bargained benefits).