781—20.13(12I) Qualified withdrawals. This rule establishes the procedures for the payment of qualified withdrawals. A qualified withdrawal is a withdrawal from an account that is used to pay for any qualified disability expenses of the account owner.
	20.13(1) The account owner must initiate withdrawal for qualified disability expenses. The account owner must file the appropriate form with the plan administrator.
	20.13(2) Qualified withdrawals will be paid as provided in the plan disclosure documents.
	20.13(3) Each qualified withdrawal will be comprised partly of contributions and partly of earnings, based upon the same proportion that contributions and earnings comprise the account owner’s account at the time of the withdrawal.
	20.13(4) Funds that are distributed to an account owner shall be reported to the IRS on a 1099-Q in the tax year in which the withdrawal is made. The account owner will receive the 1099-Q for any withdrawals made to or as instructed by the account owner. The account owner receiving the 1099-Q must determine whether the withdrawal was made for a qualified disability expense or was a nonqualified withdrawal.
[ARC 4464C, IAB 5/22/19, effective 6/26/19]