2015 Form 1099-Misc Instructions
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Section references are to the Internal Revenue Code unless otherwise
noted.
For the latest information about developments related to Form
1099-MISC and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form1099misc.
Corrections to Form 1099-MISC. A new paragraph has been added
to these instructions regarding corrections to From MISC.
FATCA filing requirements of certain foreign financial
institutions (FFIs). Beginning in 2014, an FFI with a chapter 4
requirement to report a U.S account maintained by the FFI that is held
by a specified U.S. person may satisfy this requirement by reporting on
Form(s) 1099 under the election described in Regulations section
1.1471-4(d)(5)(i)(A). Additionally, a U.S. payor may satisfy its
chapter 4 requirement to report such as a U.S. account by reporting on
Form(s) 1099. See Regulations section 1.1471-4(d)(2)(iii)(A). Form
1099-MISC is among the Forms 1099 used for such a purpose. A new check
box was added to Form 1099-MISC to identify an FFI filing this form to
satisfy its chapter 4 requirement.
Medicaid waiver payments. Certain Medicaid waiver payments
may be excludable from income as difficulty of care payments (see Difficulty-of-care-payments, later). For more
information, see Notice 2014-7, available at http://www.irs.gov/irb/2014-4_IRB/ar06.html,
and Medicaid waiver payments frequently asked questions (FAQs),
available at http://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income.
In addition to these specific instructions, you should also use the 2015 General Instructions
for Certain Information Returns. Those general instructions include
information about the following topics.
- Who must file (nominee/middleman; certain FFIs and U.S. payors
that report on Form(s) 1099 to satisfy their chapter 4 reporting
requirements).
- When and where to file.
- Electronic reporting requirements.
- Corrected and void returns.
- Statements to recipients.
- Taxpayer identification numbers.
- Backup withholding.
- Penalties.
- The definitions of terms applicable for chapter 4 purposes that
are referenced in these instructions.
- Other general topics.
You can get the general instructions from www.irs.gov/form1099misc
or by calling 1-800-TAX-FORM (1-800-829-3676).
File Form 1099-MISC, Miscellaneous Income, for each person to whom
you have paid during the year:
- At least $10 in royalties (see the instructions for Box 2) or broker payments in lieu of dividends or
tax-exempt interest (see the instructions for Box 8);
- At least $600 in:
- rents (box 1);
- services performed by someone who is not your employee
(including parts and materials), box 7;
- prizes and awards (see instructions for boxes 3 and 7);
- other income payments (box 3);
- medical and health care payments (box 6);
- crop insurance proceeds (box 10);
- cash payments for fish (or other aquatic life) you purchase
from anyone engaged in the trade or business of catching fish (box 7);
- generally, the cash paid from a notional principal contract to
an individual, partnership, or estate (box 7);
- Payments made to an attorney. See See Payments to attorneys
later; or
- Any fishing boat proceeds (box 5).
In addition, use Form 1099-MISC to report that you made direct
sales of at least $5,000 of consumer products to a buyer for resale
anywhere other than a permanent retail establishment (box 9).
You must also file Form 1099-MISC for each person from whom you
have withheld any federal income tax (report in box 4) under the backup
withholding rules regardless of the amount of the payment.
Caution! Be sure to report each payment in the proper box
because the IRS uses this information to determine whether the
recipient has properly reported the payment.
Trade or business reporting only. top Report on Form 1099-MISC only when payments are
made in the course of your trade or business. Personal payments are not
reportable. You are engaged in a trade or business if you operate for
gain or profit. However, nonprofit organizations are considered to be
engaged in a trade or business and are subject to these reporting
requirements. Other organizations subject to these reporting
requirements include trusts of qualified pension or profit-sharing
plans of employers, certain organizations exempt from tax under section
501(c) or (d), farmers' cooperatives that are exempt from tax under
section 521, and widely held fixed investment trusts. Payments by
federal, state, or local government agencies are also reportable.
Exceptions. top
Some payments are not required to be reported on Form 1099-MISC,
although they may be taxable to the recipient. Payments for which a
Form 1099-MISC is not required include all of the following.
- Generally, payments to a corporation (including a limited
liability company (LLC) that is treated as a C- or S-Corporation). But
see Reportable payments to corporations
later.
- Payments for merchandise, telegrams, telephone, freight, storage,
and similar items.
- Payments of rent to real estate agents. But the real estate agent
must use Form 1099-MISC to report the rent paid over the property
owner. See Regulations section 1.6041-1(e)(5), Example 5, and the
instructions for box 1.
- Wages paid to employees (report on Form W-2, Wage and Tax
Statement).
- Military differential wage payments made to employees while they
are on active duty in the Armed Forces or other uniformed services
(report on Form W-2).
- Business travel allowances paid to employees (may be reportable
on Form W-2).
- Cost of current life insurance protection (report on Form W-2 or
Form 1099-R, Distributions From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc.).
- Payments to a tax-exempt organization including tax-exempt trusts
(IRAs, HSAs, Archer MSAs, and Coverdell ESAs), the United States, a
state, the District of Columbia, a U.S. possession, or a foreign
government.
- Payments made to or for homeowners from the HFA Hardest Hit Fund
or the Emergency Homeowners' Loan Program or similar state program
(report on Form 1098-MA).
Form 1099-K. top Payments made
with a credit card or payment card and certain other types of payments,
including third party network transactions, must be reported on Form
1099-K by the payment settlement entity under section 6050W and are not
subject to reporting on Form 1099-MISC. See the separate instructions
for Form
1099-K.
Fees paid to informers. top A
payment to an informer as an award, fee, or reward for information
about criminal activity does not have to be reported if the payment is
made by a federal, state, or local government agency, or by a nonprofit
organization exempt from tax under section 501(c)(3) that makes the
payment to further the charitable purpose of lessening the burdens of
government. For more information, see Regulations section 1.6041-3(l).
Scholarships. top Do not use Form
1099-MISC to report scholarship or fellowship grants. Scholarship or
fellowship grants that are taxable to the recipient because they are
paid for teaching, research, or other services as a condition for
receiving the grant are considered wages and must be reported on Form
W-2. Other taxable scholarship or fellowship payments (to a degree or
nondegree candidate) do not have to be reported by you to the IRS on
any form. See section 117(b)-(d) and Regulations section 1.6041-3(n)
for more information.
Difficulty-of-care payments.
top Do not use Form 1099-MISC to report
difficulty-of-care payments that are excludable from the recipient's
gross income. Difficulty-of-care payments to foster care providers are
not reportable if paid for fewer than 11 children under age 19 and
fewer than six individuals age 19 or older. Amounts paid for more than
10 children or more than five other individuals are reportable on Form
1099-MISC.
Canceled debt. top
A canceled debt is not reportable on Form 1099-MISC. Canceled debts are
required to be reported on Form 1099-C, Cancellation of Debt, by
financial institutions, credit unions, Federal Government Agencies,
certain agencies connected with the Federal Government, and an
organization where the lending of money (such as finance and credit
card companies) is a significant trade or business. See the Instructions
for Forms 1099-A and 1099-C.
Reportable payments to corporations.
top The following payments made to corporations
generally must be reported on Form 1099-MISC.
- Medical and health care payments reported in box 6.
- Fish purchases for cash reported in box 7.
- Attorneys' fees reported in box 7.
- Gross proceeds paid to an attorney reported in box 14.
- Substitute payments in lieu of dividends or tax-exempt interest
reported in box 8.
- Payments by a federal executive agency for services (vendors)
reported in box 7.
Caution! Federal executive agencies may also have to file
Form 8596, Information Return for Federal Contracts, and Form 8596-A,
Quarterly Transmittal of Information Returns for Federal Contracts, if
a contracted amount for personal services is more than $25,000. See
Rev. Rul. 2003-66, which is on page 1115 of Internal Revenue Bulletin
2003-26 at www.irs.gov/pub/irs-irbs/irb03-26.pdf
for details.
Payments to attorneys. top
The term attorney includes a law firm or other provider of legal
services. Attorneys' fees of $600 or more paid in the course of your
trade or business are reportable in box 7 of Form 1099-MISC.
Gross proceeds paid to attorneys. top
Under section 6045(f), report in box 14 payments that:
- Are made to an attorney made in the course of your trade or
business in connection with legal services, for example, as in a
settlement agreement,
- Total $600 or more, and
- Are not reportable by you in box 7.
Generally, you are not required to report the claimant's attorney's
fees. For example, an insurance company pays a claimant's attorney
$100,000 to settle a claim. The insurance company reports the payment
as gross proceeds of $100,000 in box 14. The insurance company does not
have a reporting requirement for the claimant's attorney's fees
subsequently paid from these funds.
These rules apply whether or not the legal services are provided to
the payer and whether or not the attorney is exclusive payee (for
example, the attorney's and claimant's names are on one check) or other
information returns are required for some or all of a payment under
section 6041A(a)(1). For example, a person who, in the course of a
trade or business, pays $600 of taxable damages to a claimant by paying
that amount to a claimant's attorney is required to furnish Form
1099-MISC to the claimant under section 6041 and furnish Form 1099-MISC
to the claimant's attorney under section 6045(f). For more examples and
exceptions relating to payments to attorneys, see Regulations section
1.6045-5.
However, these rules do not apply to wages paid to attorneys that
are reportable on Form W-2 or to profits distributed by a partnership
to its partners that are reportable on:
- Schedule K-1 (Form 1065), Partner's Share of Income, Deductions,
Credits, etc., or
- Schedule K-1 (Form 1065-B), Partner's Share of Income (Loss) From
an Electing Large Partnership.
Payments to corporations for legal services. top The exemption from reporting payments made to
corporations does not apply to payments for legal services. Therefore,
you must report attorneys' fees (in box 7) or gross proceeds (in box
14) as described earlier to corporations that provide legal services.
Taxpayer identification numbers (TINs). top To report payments to an attorney on Form
1099-MISC, you must obtain the attorney's TIN. You may use Form W-9,
Request for Taxpayer Identification Number and Certification, to obtain
the attorney's TIN. An attorney is required to promptly supply its TIN
whether it is a corporation or other entity, but the attorney is not
required to certify its TIN. If the attorney fails to provide its TIN,
the attorney may be subject to a penalty under section 6723 and its
regulations, and you must backup withhold on the reportable payments.
Fish purchases. top
If you are in the trade or business of purchasing fish for resale, you
must report total cash payments of $600 or more paid during the year to
any person who is engaged in the trade or business of catching fish.
Report these payments in box 7. You are required to keep records
showing the date and amount of each cash payment made during the year,
but you must report only the total amount paid for the year on Form
1099-MISC.
"Fish" means all fish and other forms of aquatic life. "Cash" means
U.S. and foreign coin and currency and a cashier's check, bank draft,
traveler's check, or money order. Cash does not include a check drawn
on your personal or business account.
Deceased employee's wages.
top If an employee dies during the year, you must
report the accrued wages, vacation pay, and other compensation paid
after the date of death. If you made the payment in the same year the
employee died, you must withhold social security and Medicare taxes on
the payment and report them only as social security and Medicare wages
on the employee's Form W-2 to ensure that proper social security and
Medicare credit is received. On the Form W-2, show the payment as
social security wages (box 3) and Medicare wages and tips (box 5) and
the social security and Medicare taxes withheld in boxes 4 and 6; do
not show the payment in box 1 of Form W-2.
If you made the payment after the year of death, do not report it
on Form W-2, and do not withhold social security and Medicare taxes.
Whether the payment is made in the year of death or after the year
of death, you also must report the payment to the estate or beneficiary
on Form 1099-MISC. Report the payment in box 3 (rather than in box 7 as
specified in Rev. Rul. 86-109, 1986-2 C.B. 196). See the Example that follows. Enter the name and TIN of
the payment recipient on Form 1099-MISC. For example, if the recipient
is an individual beneficiary, enter the name and social security number
of the individual; if the recipient is the estate, enter the name and
employer identification number of the estate. The general backup
withholding rules apply to this payment.
Death benefits from nonqualified deferred compensation plans or
section 457 plans paid to the estate or beneficiary of a deceased
employee are reportable on Form 1099-MISC. Do not report these death
benefits on Form 1099-R. However, if the benefits are from a qualified
plan, report them on Form 1099-R. See the Instructions for Forms 1099-R and 5498.
Example. top Before Employee A's death on June 15, 2015, A was
employed by Employer X and received $10,000 in wages on which federal
income tax of $1,500 was withheld. When A died, X owed A $2,000 in
wages and $1,000 in accrued vacation pay. The total of $3,000 (less the
social security and Medicare taxes withheld) was paid to A's estate on
July 20, 2015. Because X made the payment during the year of death, X
must withhold social security and Medicare taxes on the $3,000 payment
and must complete Form W-2 as follows.
- Box 1 - 10000.00 (does not include the $3,000 accrued wages and
vacation pay)
- Box 2 - 1500.00
- Box 3 - 13000.00 (includes the $3,000 accrued wages and vacation
pay)
- Box 4 - Social security tax withheld on the amount in box 3
- Box 5 - 13000.00 (includes the $3,000 accrued wages and vacation
pay)
- Box 6 - Medicare tax withheld on the amount in box 5 Employer X
also must complete Form 1099-MISC as follows.
- Boxes for recipient's name, address, and TIN - the estate's name,
address, and TIN.
- Box 3 - 3000.00 (Even though amounts were withheld for social
security and Medicare taxes, the gross amount is reported here.)
If Employer X made the payment after the year of death, the $3,000
would not be subject to social security and Medicare taxes and would
not be shown on Form W-2. However, the employer would still file Form
1099-MISC.
Employee business expense
reimbursements. top Do not use Form 1099-MISC
to report employee business expense reimbursements. Report payments
made to employees under a nonaccountable plan as wages on Form W-2.
Generally, payments made to employees under an accountable plan are not
reportable on Form W-2, except in certain cases when you pay a per
diem or mileage allowance. For more information, see the
Instructions for Forms W-2 and W-3; Pub. 463, Travel, Entertainment,
Gift, and Car Expenses; and Pub. 1542, Per Diem Rates. For information
on reporting employee moving expense reimbursements on Form W-2, see
the Instructions for Forms W-2 and W-3.
Independent contractor or
employee. top Generally, you must report
payments to independent contractors on Form 1099-MISC in box 7. See the
instructions for box 7.
TIP. top Section
530 of the Revenue Act of 1978 as extended by section 269(c) of P.L.
97-248 deals with the employment tax status of independent contractors
and employees. To qualify for relief under section 530, employers must
file Form 1099-MISC. Additional requirements for relief are discussed
in Rev. Proc. 85-18, 1985-1 C.B. 518. Also see Pub. 15-A, Employer's
Supplemental Tax Guide, for special rules that may apply to technical
service specialists and test proctors and room supervisors.
Transit passes and parking for
independent contractors. Although you cannot provide qualified
transportation fringes to independent contractors, the working
condition and de minimis fringe rules for transit passes and
parking apply to independent contractors. Tokens or farecards that
enable an independent contractor to commute on a public transit system
(not including privately operated van pools) are excludable from the
independent contractor's gross income and are not reportable on Form
1099-MISC if their value in any month is $21 or less. However, if the
value of a pass provided in a month is greater than $21, the full value
is includible in gross income and is reportable on Form 1099-MISC. The
value of parking may be excludable from an independent contractor's
gross income, and, therefore, not reportable on Form 1099-MISC if
certain requirements are met. See Regulations section 1.132-9(b),
Q/A-24.
Directors' fees. top
You must report directors' fees and other remuneration, including
payments made after retirement, on Form 1099-MISC in the year paid.
Report them in box 7.
Commissions paid to lottery ticket
sales agents. top
A state that has control over and responsibility for online and instant
lottery games must file Form 1099-MISC to report commissions paid,
whether directly or indirectly, to licensed sales agents. For example,
State X retains control over and liability for online and instant
lottery games. For online ticket sales, State X pays commissions by
allowing an agent to retain 5% of the ticket proceeds the agent remits
to State X. For instant ticket sales, State X pays commissions by
providing tickets to the agent for 5% less than the proceeds to be
obtained by the agent from the sale of those tickets. If the
commissions for the year total $600 or more, they must be reported in
box 7 on Form 1099-MISC. See Rev. Rul. 92-96, 1992-2 C.B. 281.
Escrow agent; construction project.
When an escrow agent maintains owner-provided funds in an escrow
account for a construction project, performs management and oversight
functions relating to the construction project, and makes payments for
the owner and the general contractor, the escrow agent must file Form
1099-MISC for reportable payments of $600 or more. This requirement
applies whether or not the escrow agent is a bank. If the contractor is
the borrower of the funds, do not report on Form 1099-MISC any loan
payments made to the contractor/borrower.
Indian gaming profits, payments to
tribal members. top If you make payments to
members of Indian tribes from the net revenues of class II or class III
gaming activities conducted or licensed by the tribes, you must
withhold federal income tax on such payments. File Form 1099-MISC to
report the payments and withholding to tribal members. Report the
payments in box 3 and the federal income tax withheld in box 4. Pub.
15-A contains the necessary "Tables for Withholding on Distributions of
Indian Gaming Profits to Tribal Members."
State or local sales taxes. top If state or local sales taxes are imposed on the
service provider and you (as the buyer) pay them to the service
provider, report them on Form 1099-MISC as part of the reportable
payment. However, if sales taxes are imposed on you (as the buyer) and
collected from you by the service provider, do not report the sales
taxes on Form 1099-MISC.
Widely held fixed investment trusts
(WHFITs). top Trustees and middlemen of WHFITs
must report items of gross income attributable to a trust income holder
(TIH) on the appropriate Form 1099. A tax information statement that
includes the information provided to the IRS on Forms 1099, as well as
additional information identified in Regulations section 1.671-5(e),
must be furnished to TIHs. For details, see the 2015 General Instructions for Certain
Information Returns.
If you are required to file Form 1099-MISC, you must provide a
statement to the recipient. For more information about the requirement
to furnish a statement to each recipient, and truncation, see Part M
in the 2015 General Instructions for Certain Information Returns.
Truncating recipient's
identification number on paper payee statements. top
Pursuant to Treasury Regulations 301.6109-4, all filers of of this form
may truncate a recipient's identification number (social security
number (SSN), individual taxpayer identification number (ITIN),
adoption taxpayer identification number (ATIN), or employer
identification number (EIN)) on payee statements. Truncation is not
allowed on any documents the filer files with the IRS. A payer's
identification number may not be truncated on any form. See part J in the 2015
General Instructions for Certain Information Returns.
Check the box if you are a U.S. payor that is reporting on
Form(s) 1099 (including reporting payments on this Form 1099-MISC) as
part of satisfying your requirement to report with respect to a U.S.
account for chapter 4 purposes as described in Regulations section
1.1471-4(d)(2)(iii)(A). In additon, check the box if you are an FFI
reporting payments to a U.S. account persuant to an election described
in Regulations section 1.147-4(d)(5)(i)(A). Finally, check the box if
you are an FFI makeing the election described in Regulations section
1.147-4(d)(5)(i)(A) and are reporting a U.S. account for chapter 4
purposes to which no payments during the year that are reportable on
any applicable Form 1099 (or are reporting a U.S account to which you
made payments during the year that do not reach the applicable
reporting threshold for any applicable Form 1099).
You may enter an "X" in this box if you were notified by the IRS
twice
within 3 calendar years that the payee provided an incorrect TIN. If
you mark this box, the IRS will not send you any further notices about
this account.
However, if you received both IRS notices in the same year, or
if you received them in different years but they both related to
information returns filed for the same year, do not check the box at
this time. For purposes of the two-notices-in-3-years rule, you are
considered to have received one notice. You are not required to send a
second "B" notice upon receipt of the second notice. See part N
in the 2015 General Instructions for Certain Information Returns for
more information.
TIP. For information on the TIN Matching System offered
by the IRS, see the 2015
General Instructions for Certain Information Returns.
If you need to correct a 1099-MISC that you already sent to the IRS:
- For paper forms, see the 2015 General Instructions for Certain
Information Returns, Part H;
- For electronic corrections, see Publication
1220, Specifications for Electronic Filing of Forms 1097, 1098,
1099, 3921, 3922, 5498, and W-2G.
Caution! If you are filing a correction on a paper form,
do not check the VOID box on the form. A checked VOID box alerts IRS
scanning equipment to ignore the form and proceed to the next one. Your
correction will not be entered into IRS records if you check the VOID
box.
Recipient's Identification Number Return
to top
Enter the recipient's identification number using hyphens in the
proper format. SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX
format. EINS should be in the XX-XXXXXXX format. You should make every
effort to insure that you have the correct type of number reported in
the correct format.
The account number is required if you have multiple accounts for
a recipient for whom you are filing more than one Form 1099-MISC. The
account number is also required if you check the "FACTA filing
requirement" box. See FACTA Filing Requirement Check
Box, earlier. Additionally, the IRS encourages you to designate an
account number for all Forms 1099-MISC that you file. See part L
in the 2015 General Instructions for Certain Information Returns.
Enter amounts of $600 or more for all types of rents, such as any
of the following.
- Real estate rentals paid for office space. However, you do not
have to report these payments on Form 1099-MISC if you paid them to a
real estate agent. But the real estate agent must use Form 1099-MISC to
report the rent paid over to the property owner. See Regulations
section 1.6041-1(e)(5), Example 5.
- Machine rentals (for example, renting a bulldozer to level
your parking lot). If the machine rental is part of a contract that
includes both the use of the machine and the operator, prorate the
rental between the rent of the machine (report that in box 1) and the
operator's charge (report that as nonemployee compensation in box 7).
- Pasture rentals (for example, farmers paying for the use of
grazing land).
Public housing agencies must report in
box 1 rental assistance
payments made to owners of housing projects. See Rev. Rul. 88-53,
1988-1 C.B. 384.
Coin-operated amusements. top If an arrangement between an owner of
coin-operated amusements and an owner of a business establishment where
the amusements are placed is a lease of the amusements or the amusement
space, the owner of the amusements or the owner of the space, whoever
makes the payments, must report the lease payments in box 1 of Form
1099-MISC if the payments total at least $600. However, if the
arrangement is a joint venture, the joint venture must file a Form
1065, U.S. Return of Partnership Income, and provide each partner with
the information necessary to report the partner's share of the taxable
income. Coin-operated amusements include video games, pinball machines,
jukeboxes, pool tables, slot machines, and other machines and gaming
devices operated by coins or tokens inserted into the machines by
individual users. For more information, see Rev. Rul. 92-49, 1992-1
C.B. 433.
Enter gross royalty payments (or similar amounts) of $10 or
more. Report royalties from oil, gas, or other mineral properties
before reduction for severance and other taxes that may have been
withheld and paid. Do not include surface royalties. They should be
reported in box 1. Do not report oil or gas payments for a working
interest in box 2; report payments for working interests in box 7. Do
not report timber royalties made under a pay-as-cut contract; report
these timber royalties on Form 1099-S, Proceeds From Real Estate
Transactions.
Use box 2 to report royalty payments from intangible property
such as patents, copyrights, trade names, and trademarks. Report the
gross royalties (before reduction for fees, commissions, or expenses)
paid by a publisher directly to an author or literary agent, unless the
agent is a corporation. The literary agent (whether or not a
corporation) that receives the royalty payment on behalf of the author
must report the gross amount of royalty payments to the author on Form
1099-MISC whether or not the publisher reported the payment to the
agent on its Form 1099-MISC.
Enter other income of $600 or more required to be reported on
Form 1099-MISC that is not reportable in one of the other boxes on the
form.
Also enter in box 3 prizes and awards
that are not for services
performed. Include the fair market value (FMV) of merchandise won on
game shows. Also include amounts paid to a winner of a sweepstakes not
involving a wager. If a wager is made, report the winnings on Form
W-2G, Certain Gambling Winnings.
TIP. If, not later than 60 days after the winner
becomes entitled to the prize, the winner can choose the option of a
lump sum or an annuity payable over at least 10 years, the payment of
winnings is considered made when actually paid. If the winner chooses
an annuity, file Form 1099-MISC each year to report the annuity paid
during that year.
Do not include prizes and awards paid
to your employees. Report
these on Form W-2. Do not include in box 3 prizes and awards for
services performed by nonemployees, such as an award for the top
commission salesperson. Report them in box 7.
Prizes and awards received in
recognition of past
accomplishments in religious, charitable, scientific, artistic,
educational, literary, or civic fields are not reportable if:
- The winners are chosen without action on their part,
- The winners are not expected to perform future services, and
- The payer transfers the prize or award to a charitable
organization or governmental unit under a designation made by the
recipient. See Rev. Proc. 87-54, 1987-2 C.B. 669.
Other items required to be reported in box 3 include the
following.
- Payments as explained earlier under Deceased employee's wages.
- Payments as explained earlier under Indian
gaming profits, payments to tribal
members.
- A payment or series of payments made to individuals for
participating in a medical research study or studies.
- Termination payments to former self-employed insurance
salespeople. These payments are not subject to self-employment tax and
are reportable in box 3 (rather than box 7) if all the following apply.
- The payments are received from an insurance company
because of services performed as an insurance salesperson for the
company.
- The payments are received after termination of the
salesperson's agreement to perform services for the company.
- The salesperson did not perform any services for the
company after termination and before the end of the year.
- The salesperson enters into a covenant not to compete
against the company for at least 1 year after the date of termination.
- The amount of the payments depends primarily on policies
sold by the salesperson or credited to the salesperson's account during
the last year of the service agreement or to the extent those policies
remain in force for some period after termination, or both.
- The amount of the payments does not depend at all on
length of service or overall earnings from the company (regardless of
whether eligibility for payment depends on length of service).
If the termination payments do not meet all these requirements, report
them in box 7.
- Generally, all punitive damages, any damages for nonphysical
injuries or sickness, and any other taxable damages. Report punitive
damages even if they relate to physical injury or physical sickness.
Generally, report all compensatory damages for nonphysical injuries or
sickness, such as employment discrimination or defamation. However, do
not report damages (other than punitive damages):
- Received on account of personal physical injuries or
physical sickness;
- That do not exceed the amount paid for medical care for
emotional distress;
- Received on account of nonphysical injuries (for example,
emotional distress) under a written binding agreement, court decree, or
mediation award in effect on or issued by September 13, 1995; or
- That are for a replacement of capital, such as damages
paid to a buyer by a contractor who failed to complete construction of
a building.
Damages received on account of emotional distress, including
physical symptoms such as insomnia, headaches, and stomach disorders,
are not considered received for a physical injury or physical sickness
and are reportable unless described in b or c above. However, damages
received on account of emotional distress due to physical injuries or
physical sickness are not reportable.
Also report liquidated damages received
under the Age
Discrimination in Employment Act of 1967.
TIP. Taxable back pay damages may be wages and
reportable on Form W-2. See Pub. 957, Reporting Back Pay and Special
Wage Payments to the Social Security Administration.
Foreign agricultural workers. top Report in box 3 compensation of $600 or
more
paid in a calendar year to an H-2A visa agricultural worker who did not
give you a valid taxpayer identification number. You must also withhold
federal income tax under the backup withholding rules. For more
information, go to IRS.gov
and enter "foreign agricultural workers" in the search box.
Account reported under FATCA. top If you are an FFI reporting persuant to an
election described in Regulations section 1.147-4(d)(5)(i)(A) a U.S.
account required to be reported under chapter 4 to which during the
year you made no payments reportable on an applicable Form 1099, enter
zero in box 3. In addition, if you are an FFI described in the
preceding sentence and, during the year, you made payments to the
account required to be reported under chapter 4, but those payments are
not reportable on an applicable Form 1099 (for example, because the
payment is under the applicable reporting threshold), you must report
the account on this Form 1099-MISC and enter zero in box 3.
Enter backup withholding. For example, persons who have not
furnished their TIN to you are subject to withholding on payments
required to be reported in boxes 1, 2 (net of severance taxes), 3, 5
(to the extent paid in cash), 6, 7 (except fish purchases for cash), 8,
10, and 14. For more information on backup withholding, including the
rate, see part N in the 2015
General Instructions for Certain Information Returns.
Also enter any income tax withheld from
payments to members of
Indian tribes from the net revenues of class II or class III gaming
activities conducted or licensed by the tribes.
Enter the individual's share of all proceeds from the sale of a
catch or the FMV of a distribution in kind to each crew member of
fishing boats with normally fewer than 10 crew members. A fishing boat
has normally fewer than 10 crew members if the average size of the
operating crew was fewer than 10 on trips during the preceding 4
calendar quarters.
In addition, report cash payments of up
to $100 per trip that
are contingent on a minimum catch and are paid solely for additional
duties (such as mate, engineer, or cook) for which additional cash
payments are traditional in the industry. However, do not report on
Form 1099-MISC any wages reportable on Form W-2.
Enter payments of $600 or more made in the course of your trade
or business to each physician or other supplier or provider of medical
or health care services. Include payments made by medical and health
care insurers under health, accident, and sickness insurance programs.
If payment is made to a corporation, list the corporation as the
recipient rather than the individual providing the services. Payments
to persons providing health care services often include charges for
injections, drugs, dentures, and similar items. In these cases the
entire payment is subject to information reporting. You are not
required to report payments to pharmacies for prescription drugs.
The exemption from issuing Form 1099-MISC to a corporation does
not apply to payments for medical or health care services provided by
corporations, including professional corporations. However, you are not
required to report payments made to a tax-exempt hospital or extended
care facility or to a hospital or extended care facility owned and
operated by the United States (or its possessions), a state, the
District of Columbia, or any of their political subdivisions, agencies,
or instrumentalities.
Caution! Generally, payments made under a
flexible
spending arrangement (as defined in section 106(c)(2)) or a health
reimbursement arrangement which is treated as employer-provided
coverage under an accident or health plan for purposes of section 106
are exempt from the reporting requirements of section 6041.
Enter nonemployee compensation of $600 or more. Include fees,
commissions, prizes and awards for services performed as a nonemployee,
other forms of compensation for services performed for your trade or
business by an individual who is not your employee, and fish purchases
for cash. Include oil and gas payments for a working interest, whether
or not services are performed. Also include expenses incurred for the
use of an entertainment facility that you treat as compensation to a
nonemployee. Federal executive agencies that make payments to vendors
for services, including payments to corporations, must report the
payments in this box. See Rev. Rul. 2003-66, which is on page 1115 of
Internal Revenue Bulletin 2003-26 at www.irs.gov/pub/irs-irbs/irb03-26.pdf.
What is nonemployee compensation? If the following four
conditions are met, you must generally report a payment as nonemployee
compensation.
- You made the payment to someone who is not your employee;
- You made the payment for services in the course of your
trade or business (including government agencies and nonprofit
organizations);
- You made the payment to an individual, partnership, estate, or,
in some cases, a corporation; and
- You made payments to the payee of at least $600 during
the year.
Self-employment tax. top Generally, amounts reportable in box 7 are
subject
to self-employment tax. If payments to individuals are not subject to
this tax and are not reportable elsewhere on Form 1099-MISC, report the
payments in box 3. However, report section 530 (of the Revenue Act of
1978) worker payments in box 7.
Examples. The following are some examples of
payments to
be reported in box 7.
- Professional
service fees, such as fees to attorneys (including corporations),
accountants, architects, contractors, engineers, etc.
- Fees paid by one professional to another, such as
fee-splitting or referral fees.
- Payments by attorneys to witnesses or experts in legal
adjudication.
- Payment for services, including payment for parts or
materials used to perform the services if supplying the parts or
materials was incidental to providing the service. For example, report
the total insurance company payments to an auto repair shop under a
repair contract showing an amount for labor and another amount for
parts, if furnishing parts was incidental to repairing the auto.
- Commissions paid to nonemployee salespersons that are
subject to repayment but not repaid during the calendar year.
- A fee paid to a nonemployee, including an independent
contractor, or travel reimbursement for which the nonemployee did not
account to the payer, if the fee and reimbursement total at least $600.
To help you determine whether someone is an independent contractor or
an employee, see Pub. 15-A.
- Payments to nonemployee entertainers for services. Use Form
1042-S, Foreign Person's U.S. Source Income Subject to Withholding, for
payments to nonresident aliens.
- Exchanges of services between individuals in the course of
their trades or businesses. For example, an attorney represents a
painter for nonpayment of business debts in exchange for the painting
of the attorney's law offices. The amount reportable by each on Form
1099-MISC is the FMV of his or her own services performed. However, if
the attorney represents the painter in a divorce proceeding, this is an
activity that is unrelated to the painter's trade or business. The
attorney must report on Form 1099-MISC the value of his or her
services. But the painter need not report on Form 1099-MISC the value
of painting the law offices because the work is in exchange for legal
services that are separate from the painter's business.
- Taxable fringe benefits for nonemployees. For information on
the valuation of fringe benefits, see Pub. 15-B, Employer's Tax Guide
to Fringe Benefits.
- Gross oil and gas payments for a working interest.
- Payments to an insurance salesperson who is not your common
law or statutory employee. See Pub. 15-A for the definition of
employee. However, for termination payments to former insurance
salespeople, see the instructions for box 3.
- Directors' fees as explained under Directors'
fees, earlier.
- Commissions paid to licensed lottery ticket sales agents as
explained under Commissions paid to lottery
ticket sales agents, earlier.
- Payments to section 530 (of the Revenue Act of 1978)
workers. See the TIP under Independent
contractor or employee, earlier.
- Fish purchases for cash. See Fish
purchases, earlier.
Nonqualified deferred compensation
(Section 409A) income. top Include in box
7 the
amount of all deferrals (plus earnings) reported in box 15b that are
includible in gross income because the nonqualified deferred
compensation (NQDC) plan fails to satisfy the requirements of section
409A. See Regulations sections 1.409A-1 through 1.409A-6.
Golden parachute payments.
top A parachute payment is any payment that
meets
all of the following conditions.
- The payment is in the nature of compensation.
- The payment is to, or for the benefit of, a disqualified
individual.
- The payment is contingent on a change in the ownership of a
corporation, the effective control of a corporation, or the ownership
of a substantial portion of the assets of a corporation (a change in
ownership or control).
- The payment has (together with other payments described in
1, 2, and 3, above, made to the same individual) an aggregate present
value of at least three times the individual's base amount.
A disqualified individual is one who at any time during the
12-month period prior to and ending on the date of the change in
ownership or control of the corporation (the disqualified individual
determination period) was an employee or independent contractor and
was, in regard to that corporation, a shareholder, an officer, or a
highly compensated individual.
For more details, see Regulations section 1.280G-1. Also, see
Rev. Proc. 2003-68, which is on page 398 of Internal Revenue Bulletin
2003-34 at www.irs.gov/pub/irs-irbs/irb03-34.pdf,
concerning the valuation of stock options for purposes of golden
parachute payment rules. For the treatment of unvested shares of
restricted stock, see Rev. Rul. 2005-39, available at www.irs.gov/irb/2005-27_IRB/ar08.html.
Independent
contractor. Enter in box 7 the total
compensation, including any golden parachute payment. For excess golden
parachute payments, see box 13 reporting
instructions.
For employee reporting of these
payments, see Pub. 15-A.
Payments not reported in box 7.
top Do not report in
box 7, nor elsewhere on Form 1099-MISC;
- expense reimbusements paid to volunteers of non-profit
organizations;
- decreased employee wages paid the year after death (report
in box 3) (See Deceased employee's
wages, earlier);
- payments more appropriately described as rent (report in box
1), royalties (report in box 2), other income not subject to
self-employment tax (report in box 3), interest (use Form 1099-INT);
- the cost of current life insurance protection (report on
Form W-2 or Form 1099-R);
- an employee's wages, travel or auto allowance, or bonuses
(report on Form W-2); and
- the cost of group-term life insurance paid on behalf of a
former employee (report on Form W-2).
Illustrated example.
Enter aggregate payments of at least $10 received by a broker
for a customer in lieu of dividends or tax-exempt interest as a result
of a loan of a customer's securities. For this purpose, a customer
includes an individual, trust, estate, partnership, association,
company, or corporation. See Notice 2003-67, which is on page 752 of
Internal Revenue Bulletin 2003-40 at www.irs.gov/pub/irs-irbs/irb03-40.pdf.
It does not include a tax-exempt organization, the United States, any
state, the District of Columbia, a U.S. possession, or a foreign
government. File Form 1099-MISC with the IRS and furnish a copy to the
customer for whom you received the payment. Also, file Form 1099-MISC
for and furnish a copy to an individual for whom you received a payment
in lieu of tax-exempt interest.
Substitute payment means a payment in
lieu of (a) a dividend
or (b) tax-exempt interest to the extent that interest including OID)
has accrued while the securities were on loan.
Enter an "X" in the checkbox for sales by you of $5,000 or
more of consumer products to a person on a buy-sell,
deposit-commission, or other commission basis for resale (by the buyer
or any other person) anywhere other than in a permanent retail
establishment. Do not enter a dollar amount in this box.
If you are
reporting an amount in box 7, you may also check
box 9 on the same Form 1099-MISC.
The report you must give to the
recipient for these direct
sales need not be made on the official form. It may be in the form of a
letter showing this information along with commissions, prizes, awards,
etc.
Enter crop insurance proceeds of $600 or more paid to
farmers by insurance companies unless the farmer has informed the
insurance company that expenses have been capitalized under section
278, 263A, or 447.
Enter any excess golden parachute payments. An excess
parachute payment is the amount of the excess of any parachute payment
over the base amount (the average annual compensation for services
includible in the individual's gross income over the most recent 5 tax
years). See Q/A-38 through Q/A-44 of Regulations section 1.280G-1 for
how to compute the excess amount.
See Golden
parachute payments,
earlier, for more information.
Enter gross proceeds of $600 or more paid to an attorney in
connection with legal services (regardless of whether the services are
performed for the payer). See Payments to attorneys,
earlier.
You do not have to complete this box. For details, see
Notice 2008-115, available at www.irs.gov/irb/2008-52_IRB/ar10.html.
If you complete this box, enter the total amount deferred
during the year of at least $600 for the nonemployee under all
nonqualified plans. The deferrals during the year include earnings on
the current year and prior year deferrals. For additional information,
see Regulations sections 1.409A-1 through 1.409A-6.
For deferrals and earnings under NQDC
plans for employees,
see the Instructions for Forms W-2 and W-3.
Enter all amounts deferred (including earnings on amounts
deferred) that are includible in income under section 409A because the
NQDC plan fails to satisfy the requirements of section 409A. Do not
include amounts properly reported on a Form 1099-MISC, corrected Form
1099-MISC, Form W-2, or Form W-2c for a prior year. Also, do not
include amounts that are considered to be subject to a substantial risk
of forfeiture for purposes of section 409A. For additional information,
see Regulations sections 1.409A-1 through 1.409A-6; Notice 2008-113,
available at www.irs.gov/irb/2008-51_IRB/ar12.html; and Notice
2008-115; Notice 2010-6, which is available at www.irs.gov/irb/2010-03_IRB/ar08.html;
and Notice 2010-80, available at www.irs.gov/irb/2010-51_IRB/ar08.html.
The amount included in box 15b is also
includible in box 7.
These boxes may be used by payers who participate in the
Combined Federal/State Filing Program and/or who are required to file
paper copies of this form with a state tax department. See Publication
1220 for more information regarding the Combined Federal/State
Filing Program. They are provided for your convenience only and need
not be completed for the IRS. Use the state information boxes to report
payments for up to two states. Keep the information for each state
separated by the dash line. If you withheld state income tax on this
payment, you may enter it in box 16. In box 17, enter the abbreviated
name of the state and the payer's state identification number. The
state number is the payer's identification number assigned by the
individual state. In box 18, you may enter the amount of the state
payment.
If a state tax department requires that
you send them a paper
copy of this form, use Copy 1 to provide information to the state tax
department. Give Copy 2 to the recipient for use in filing the
recipient's state income tax return.
Process Date. top This is the last date a Copy A was
printed for the
Participant.
Distribution Date. top This is the date(s) that the Participant
was paid.
State Process Date1.
top This is the most recent date that one
or more
Copy 1s for the state was printed.
State Process Date2.
top This is the most recent date that one
or more
Copy 1s for the state was printed.
Office Code. top Used in electronic filing only. Enter the
office
code of the Payor (may be blank). For payors with multiple locations,
this field may be used to identify the location of the office
submitting the information return.
Caution! To file corrections for
electronically
filed
forms, see part F and Pub.
1220.
If you filed a return with the IRS and later
discover you
made
an
error on it, you must:
- Correct it as soon as possible and file Copy A and
Form 1096
with your Internal Revenue Service Center (see part D), and
- Furnish statements to recipients showing the
correction.
When making a correction, complete all information (see Filing Corrected Returns on
Paper Forms, later).
- Do not cut or separate forms that are two or three to
a
page.
Submit the entire page even if only one of the forms on the page is
completed.
- Do not staple the forms to Form 1096.
- Do not send corrected returns to the IRS if you are
correcting
state or local information only. Contact the state or local tax
department for help with this type of correction.
To correct payer information, see Reporting incorrect payer
name and/or TIN, earlier.
Form 1096. top
Use a separate Form 1096
for each type of return you are correcting. For the same type of
return, you may use one Form 1096 for both originals and corrections.
You do not need to correct a previously filed Form 1096.
CORRECTED checkbox. top Enter an "X" in
the corrected checkbox only when correcting a form previously filed
with the IRS or furnished to the recipient. Certain errors require two
returns to make the correction. See Filing Corrected Returns on
Paper Forms below to determine when to mark the "CORRECTED"
checkbox.
Account number. top
If the account number
was provided on the original return, the same account number must be
included on both the original and corrected returns to properly
identify and process the correction. If the account number was not
provided on the original return, do not include it on the corrected
return. See part L.
Recipient's statement. top You may enter a date next to the "CORRECTED"
checkbox. This will help the recipient in the case of multiple
corrections.
Filing corrected
returns on Paper Forms. top
The error charts, later, give step-by-step instructions for filing
corrected returns for the most frequently made errors. They are grouped
under Error Type 1 or 2. Correction of errors may require the
submission of more than one return. Be sure to read and follow the
steps given.
Caution! If you fail to file correct information
returns or furnish a correct payee statement, you may be subject to a
penalty. See part O.
Regulations section 301.6724-1 (relating to information return
penalties) does not require you to file corrected returns for missing
or incorrect TINs if you meet the reasonable cause criteria. You are
merely required to include the correct TIN on the next original return
you are required to file.
However, even if you meet the reasonable cause
criteria, the IRS encourages you to file corrections for incorrect or
missing TINs so that the IRS can update the payees' records.
Filing Corrected Return on Paper Forms top
Identify the correction needed based on Error Type 1 or 2; then follow the
steps to make the corrections and file the form(s). Also see Part H, earlier.
| Error Type 1 |
Correction |
Incorrect money amount(s), code, or
checkbox,
A return was filed when one should
not have been filed.
These errors require only one return to
make the correction.
Caution: If you
must correct a TIN
and/or a name and address,
follow the
instructions under Error
Type 2.
|
A. Form 1097, 1098, 1099, 3921, 3922, 5498,
or W-2G
- Prepare a new information return.
- Enter an "X" in the "CORRECTED" box (and date
(optional)) at the top of the form.
- Correct any recipient information such as money
amounts. Report other information as
per original return.
B. Form 1096
- Prepare a new transmittal Form 1096.
- Provide all requested information on the form as it
applies to Part A, 1 and 2.
- File Form 1096 and Copy A of the return with the
appropriate service center.
- Do not include a copy of the original return that was
filed incorrectly.
|
| Error Type 2 |
Correction |
No payee TIN (SSN, EIN, QI-EIN,
or
ITIN),
or
Incorrect payee TIN,
or
Incorrect payee name,
or
Original return filed using wrong
type of return (for example, a Form
1099-DIV was filed when a Form
1099-INT should have been filed).
Two separate returns are required to
make the correction properly. Follow
all instructions for both Steps 1 and 2.
|
Step 1. Identify incorrect
return submitted. |
- Prepare a new information return.
- Enter an "X" in the "CORRECTED" box (and date
(optional)) at the top of the form.
- Enter the payer, recipient, and account number
information exactly as it appeared on the original
incorrect return; however, enter 0 (zero) for all money
amounts.
|
Step 2. Report correct
information. |
A. Form 1097, 1098, 1099, 3921, 3922, 5498, or W-2G
- Prepare a new information return.
- Do not enter an "X" in the "CORRECTED" box at the
top of the form. Prepare the new return as though it
is an original.
- Include all the correct information on the form
including the correct TIN and name.
B. Form 1096
- Prepare a new transmittal Form 1096.
- Enter one of the following phrases in the bottom margin
of the form.
- Filed To Correct TIN.
- Filed to Correct Name.
- Filed to Correct Return.
- Provide all requested information on the form as it
applies to the returns prepared in Steps 1 and 2.
- File Form 1096 and Copy A of the return with the
appropriate service center.
- Do not include a copy of the original return that was
filed incorrectly.
|
Recipient name. top Show the full name and
address in the section provided on the information return. If payments
have been made to more than one recipient or the account is in more
than one name, show on the first name line the name of the recipient
whose TIN is first shown on the return. You may show the names of any
other individual recipients in the area below the first line, if
desired. Form W-2G filers, see the Instructions for Forms W-2G and 5754.
Sole proprietors. top You
must show the individual's name on the first name line; on
the
second name line, you may enter the "doing business as (DBA)" name. You
may not enter only the DBA name. For the TIN, enter either the
individual's SSN or the EIN of the business (sole proprietorship). The
IRS prefers that you enter the SSN.
Limited
liability company
(LLC). top
For a single-member LLC (including a foreign LLC with a U.S.
owner)
that is disregarded as an entity separate from its owner under
Regulations section 301.7701-3, enter the individual's name only on the
first name line and the LLC's name on the second name line. For the
TIN, enter the individual's SSN (or EIN, if applicable). If the LLC is
a corporation, partnership, etc., enter the entity's EIN.
Bankruptcy estate.
top If an individual (the debtor) for whom
you are required to file
an
information return is in Chapter 11 bankruptcy, and the debtor notified
you of the bankruptcy estate's EIN, report post-petition gross income,
gross proceeds, or other reportable payments on the applicable
information return using the estate's name and EIN. The debtor should
notify you when the bankruptcy is closed, dismissed, or converted, so
that any subsequent information returns will be filed with the correct
name and EIN. Different rules apply if the bankruptcy is converted to
Chapter 7, 12, or 13 of the Bankruptcy Code. For additional guidance,
see Notice 2006-83, 2006-40 I.R.B. 596, available at www.irs.gov/irb/2006-40_IRB/ar12.html.
TINs. top
TINs are used to associate and
verify amounts you report to the IRS with corresponding amounts on tax
returns. Therefore, it is important that you furnish correct names,
social security numbers (SSNs), individual taxpayer identification
numbers (ITINs), employer identification numbers (EINs), or adoption
taxpayer identification numbers (ATINs) for recipients on the forms
sent to the IRS.
Requesting a
recipient's
TIN. top If the recipient is a U.S.
person (including a U.S. resident
alien),
the IRS suggests that you request the recipient complete Form W-9,
Request for Taxpayer Identification Number and Certification, or Form
W-9S, Request for Student's or Borrower's Taxpayer Identification
Number and Certification, if appropriate. See the Instructions for the
Requester of Form W-9 for more information on how to request a TIN.
If the recipient
is a foreign person, the IRS suggests that you request the recipient
complete the appropriate Form W-8. See the Instructions for the
Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY.
Caution! U.S. resident aliens who rely on a "saving
clause" of a tax treaty are to complete Form W-9, not Form W-8BEN. See Pub.
515, Withholding of Tax on Nonresident Aliens and Foreign
Entities, and Pub. 519, U.S. Tax Guide for Aliens.
You may be subject to a penalty for an
incorrect or missing TIN
on
an information return. See part O.
You are required to maintain the confidentiality of information
obtained on a Form W-9/W-9S relating to the taxpayer's identity
(including SSNs, EINs, ITINs, and ATINs), and you may use such
information only to comply with the tax laws.
TIP. If the recipient does not provide a TIN, leave
the
box for the recipient's TIN blank on the Form 1097, 1098, 1099, 3921,
3922, 5498, or W-2G. Only one recipient TIN can be entered on the form.
Backup withholding may apply; see part N.
The TIN for individual recipients of information returns is the
SSN, ITIN, or ATIN. See Sole
proprietors,
earlier. For other recipients, including corporations, partnerships,
and estates, the TIN is the EIN. Income reportable after the death of
an individual must reflect the TIN of the payee, that is, of the estate
or of the surviving joint owner. For more information, see Personal Representative in Pub. 559, Survivors,
Executors, and Administrators. For LLCs, see the information on Limited Liability Company (LLC),
earlier.
SSNs, ITINs, and ATINs have nine digits
separated by
two hyphens (000-00-0000), and EINs have nine digits separated by only
one hyphen (00-0000000). Note.
Make sure you include the hyphen(s) in the correct place(s) when
completing the paper form(s).
Truncating payee identification number on payee statements.
top
Filers of information returns are permitted to truncate a payee's
SSN, ITIN, ATIN, or EIN on most payee statements. The payee's TIN may
not be truncated on Form W2-G. Where permitted, filers may truncate a
payee's identification number on the payee statement (including
substitute and composite substitute statements) furnished to the payee
in paper form or electronically. Generally, the payee statement is that
copy of an information return designated "Copy B" on the forms. A
"payee" is any person who is required to receive a copy of the
information set forth on an information return by the filer of the
return. For some forms, the term "payee" will refer to the beneficiary,
borrower, debtor, insured, participant, payer, policyholder, recipient,
shareholder, student, or transferor. If a filertruncates an
identification number on Copy B, other copies of the form furnished to
the payee may also include a truncated number. A filer may not truncate
a payee's identification on any forms the filer files with the IRS. A
filer's identification number not be truncated on any form. To truncate
where allowed, replace the first 5 digits of the 9-digit number with
asterisks (*) or Xs (for example, an SSN xxx-xx-xxxx would appear on
the paper payee statement as ***-**-xxxx or XXX-XX-xxxx). See Treasury
Decision 9675, 2014-31 I.R.B. 242, available at www.irs.gov/irb/2014-31_IRB/ar07.html.
Electronic submission of
Forms W-9. top
Requesters may establish a system for payees and payees' agents to
submit Forms W-9 electronically, including by fax. A requester is
anyone required to file an information return. A payee is anyone
required to provide a TIN to the requester.
Payee's agent. top A
payee's agent can be an investment advisor (corporation, partnership,
or individual) or an introducing broker. An investment advisor must be
registered with the Securities and Exchange Commission (SEC) under the
Investment Advisers Act of 1940. The introducing broker is a
broker-dealer that is regulated by the SEC and the National Association
of Securities Dealers, Inc., and that is not a payer. Except for a
broker who acts as a payee's agent for "readily tradable instruments,"
the advisor or broker must show in writing to the payer that the payee
authorized the advisor or broker to transmit the Form W-9 to the payer.
Generally, the electronic system must:
- Ensure the information received is the information sent and
document all occasions of user access that result in the submission.
- Make reasonably certain the person accessing the system and
submitting the form is the person identified on Form W-9.
- Provide the same information as the paper Form W-9.
- Be able to supply a hard copy of the electronic Form W-9 if
the
IRS requests it.
- Require as the final entry in the submission an electronic
signature by the payee whose name is on Form W-9 that authenticates and
verifies the submission. The electronic signature must be under
penalties of perjury and the perjury statement must contain the
language of the paper Form W-9.
TIP. For Forms W-9 that are not required to be
signed,
the
electronic system need not provide for an electronic signature or a
perjury statement.
Additional requirements may apply. See
Announcement 98-27 that
is
available on page 30 of Internal Revenue Bulletin 1998-15 at www.irs.gov/pub/irs-irbs/irb98-15.pdf
and Announcement 2001-91, which is available on page 221 of Internal
Revenue Bulletin 2001-36 at www.irs.gov/pub/irs-irbs/irb01-36.pdf.
Electronic submission of
Forms W-9S. top See the Instructions
for Forms 1098-E and 1098-T.
Use the account number box on Forms 1097, 1098, 1099, 3921,
3922,
and 5498 for an account number designation. The account number is
required if you have multiple accounts for a recipient for whom you are
filing more than one information return of the same type. Additionally,
the IRS encourages you to include the recipient's account number on
paper forms if your system of records uses the account number rather
than the name or TIN for identification purposes. Also, the IRS will
include the account number in future notices to you about backup
withholding. See Pub. 1220
if you are filing electronically.
The account number may be a checking account number,
savings account number, serial number, or any other number you assign
to the payee that is unique and will distinguish the specific account.
This number must not appear anywhere else on the form, and this box may
not be used for any other item unless the separate instructions
indicate otherwise. Using unique account numbers ensures that corrected
information returns will be processed accurately.
If you are using window envelopes to
mail statements to
recipients and using reduced rate mail, be sure the account number does
not appear in the window. The Postal Service may not accept these for
reduced rate mail.