IRS 1099 Tax Form: What to Know

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published 29 January 2025

If you have a tax paper from someone other than your employer, you may have received a 1099. But what does the form mean, and why did you receive yours?

IRS Form 1099 is informational. This means that taxes may not be due, but you should report the information (however small) anyway. Not only does this make your return more accurate, you can decrease the risk of getting audited by the IRS and potentially avoid any penalties or other tax fees associated with underfiling.

We’ll review the facts about each type of 1099 so you can get a start on the filing season — but keep in mind each state’s income tax requirements may differ from your federal return.

1099-A: Acquisition or Abandonment of Secured Property

You may have received Form 1099-A if your property was foreclosed on, abandoned, or repossessed, and met the below requirements:

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Must be land and any buildings on that land, OR
Stocks, patents, or property that doesn’t physically exist, OR
Business or trade property used for investment

A common example is a default on a house. However, you won’t receive a 1099-A if your personal car is repossessed, because motor vehicles do not meet the requirements (unless used for business).

Form 1099-A is needed to report:

Taxable income from the transaction, including
Any capital gain tax or loss resulting in the debt cancellation, AND
Any ordinary gains or losses, if applicable

The income may be reported on Form 4797 or Schedule D for federal tax purposes.

1099-B: Proceeds From Broker and Barter Exchange

Form 1099-B is issued from your broker or mutual fund company whenever you sell:

Stocks, including stock options
Futures contracts or debt instruments
Foreign currency contracts or other commodities

You’ll receive a 1099-B for every transaction (regardless of how many were sold) showing any gains or losses you made on each sale.

If this information is left out of your taxes, you could receive a CP2000, Unreported Income notice from the IRS. So it’s important to report on Schedule D and Form 8949 if applicable.

1099-C: Cancellation of Debt

You’ll likely already know if Form 1099-C is on the way since you need to negotiate a debt cancellation with your lender to receive one. Although canceled, your debt is generally taxable income. This may seem a bit unfair.

However, there are exceptions — below are a few examples. If the cancellation was due to…

Bankruptcy,
If you were insolvent at the time of cancellation, OR
If you received student loan forgiveness

… you may not face taxes on that income. Unfortunately, most other cancellations are taxable, including:

Credit card debt
Loan modifications

But you’ll only receive a 1099-C if the cancellation was worth $600 or more. However, you should always report all canceled debts regardless of whether you meet this threshold. The amount you receive is reported in “other income” on your Form 1040.

1099-CAP: Changes in Corporate Control and Capital Structure

Sometimes major structural changes occur within a corporation which result in some benefit to you. In these cases, you may receive a form detailing those benefits.

For instance, if you receive cash or stock resulting from a merger or acquisition, that’s reported on the Form 1099-CAP.

It’s important to pay attention to this form not just for tax purposes, but for investing. The 1099-CAP can signify a change in organizational structure (thus a change in your investment) and you’ll want to be aware. You might also have a gain or loss because of this change. You’ll report this information on Form 8949 to the IRS.

1099-DIV: Dividends and Distributions

If you own stock that pays dividends (or distributions) that’s reportable to the IRS.

Typically, you’ll only receive a Form 1099-DIV for amounts $10 or higher; but taxpayers are required to report any income they receive on Form 1040.

Here are some common 1099-DIV reported categories:

Ordinary and qualified dividends
Total capital gains
Collectibles gains
Foreign tax paid
Investment expenses

If you receive more than $1,500 in distributions, you may also need to file Schedule B.

1099-G: Certain Government Payments

Losing a job is never easy, so it may surprise you that your unemployment income is taxable. Since unemployment distributions are considered equivalent to wages, you’ll need to report them to the IRS.

What’s worse, unemployment fraud has gone up since the pandemic.

If you receive a Form 1099-G when you weren’t expecting one, contact your state’s unemployment agency immediately and ask for an updated form showing the actual amount of benefits received (none).

You can also report identity theft to the IRS directly by completing Form 14039, Identity Theft Affidavit.

1099-H: Health Coverage Tax Credit (HCTC) Advance Payments

Form 1099-H was for those who received advanced payments to help cover health insurance costs. This was part of a program run by the U.S. Department of the Treasury; however, the program has since ended. If you are amending returns from tax year 2021 or earlier, you may need this form.

1099-INT: Interest Income

You might have a taxable high-yield savings account or brokerage account that has issued this form to you. Form 1099-INT reports savings interest.

Often issued with a 1099-DIV, 1099-OID, or 1099-R, you may not owe tax. But it’s important to report the amount in case you do.

1099-K: Merchant Card and Third-Party Network Payments

You may have received a Form 1099-K if you’ve been paid by one or more methods:

Payment processors like PayPal or Venmo
Online marketplaces like Etsy or eBay
Side gigs like Uber or Lyft
Crowdfunding platforms including GoFundMe, or Kickstarter
Payments from freelance or contractor work

However, if your income from these payment vendors is less than $5,000, you may not get one.

Be sure to report all income, even if below the threshold. And read the rules on hobby income vs. business income to know how your 1099-K should be reported.

For more information, see Kiplinger’s report IRS Form 1099-K: When You Might Get One.

1099-LS: Reportable Life Insurance Sale

When you sell a life insurance contract, you’ll receive a 1099-LS. Instances where this may occur include:

Life settlements
A terminal illness sale
Policy transfer

The policy may not be taxed unless the amount you received exceeds your tax basis. A 1099-LS could result in:

Ordinary income
Capital gain or loss

1099-LTC: Long-Term Care and Accelerated Death Benefits

Form 1099-LTC is typically issued by insurance companies when you receive benefits from:

Medical expenses for someone who is chronically ill
Accelerated death payments for someone who is terminally ill

You may or may not be taxed on these benefits. Taxable income could be offset by the corresponding deductible expenses, but you should consult with a tax professional if you are unsure.

1099-MISC: Miscellaneous Information

Form 1099-MISC reports miscellaneous payments, like…

Prizes
Awards
Rental income
Healthcare payments
Attorney income

The threshold for receiving a 1099-MISC is…

$10 or more in royalties, OR
$600 more in other income types

You’ll use the information to fill out various schedules and parts of your Form 1040, depending on the kind of income you receive.

1099-NEC: Nonemployee Compensation

If, over the tax year, you get $600 worth of fees, commissions, prizes, benefits, and awards for nonemployee services performed, you’ll probably be issued a Form 1099-NEC.

A few common professions generally receive 1099-NECs:

Independent contractors, like accountants, lawyers, or veterinarians
Self-employed individuals, like consultants
Tradespeople like plumbers, electricians, or carpenters
Sole proprietors, like small business owners or landscapers
Freelancers, like editors or graphic design artists

This information used to be reported on 1099-MISC until the tax year 2019. For more information, see Kiplinger’s report on Understanding Self-Employment Taxes.

1099-OID: Original Issue Discount

When you buy a discounted note, bond, certificate of deposit, or other obligation, that could result in a Form 1099-OID. This means you will receive more money at maturity than you would have if you didn’t get the discount.

Because of this difference, the interest is taxable. You’ll typically get this tax form from the issuing brokerage company and report the interest on Schedule B or Form 1040.

1099-PATR: Taxable Distributions Receive From Cooperatives

Form 1099-PATR is commonly issued if you receive a distribution from a farm or co-op during the tax year.

The income is typically reported on one or more of the following forms, depending on the nature of the distribution:

Schedule C, Profit or Loss from Business
Schedule F, Profit or Loss from Farming
Form 4835, Farm Rental Income and Expenses

Consult with a tax professional if you need help determining the appropriate form(s) for your situation.

1099-Q: Payments from Qualified Education Programs

Generally, income received on Form 1099-Q is tax-free as you’ll most likely have received this form due to distributions from qualified tuition programs (529 or private plans) or a Coverdell education savings account.

However, the income could be taxable if you spent the funds on:

Non-qualified expenses
Fewer qualifying expenses than the amount you received

Consult with a tax professional if you are unsure of whether your educational expenses qualify for tax-exempt status. You cannot claim an education tax credit for the same expense claimed on the 1099-Q.

1099-QA: Distributions From ABLE Accounts

The Achieving a Better Life Experience (ABLE) program provides a tax-advantaged savings account for those with disabilities. Eligible individuals must have been disabled or blind before their 26th birthday.

Form 1099-QA reports distributions made from these accounts. The income received is generally tax-free unless the funds were not used to pay for qualified disability-related expenses. In those cases, the distribution is taxable.

For more information, see Kiplinger’s report Tax Breaks for Parents of Children With Disabilities.

Form 1099-R documents income from retirement benefits. These distributions come in two different varieties:

Pre-tax contributions, which are generally taxable
After-tax contributions, where part of the distribution is typically taxed

Retirement rollovers aren’t usually taxed. However, if you withdraw the funds to a personal account, you’ll have 60 days to roll them over to a new qualified plan. Otherwise, you may face taxes and penalties. Early distributions are also penalized.

For more information, see Kiplinger’s report How the IRS Taxes Retirement Income.

1099-S: Proceeds From Real Estate Transactions

When you sell a piece of property, you may not always think of the tax consequences. But with Form 1099-S, you should.

Common examples of 1099-LS proceeds include:

Land
Detached houses
Townhouses
Apartments
Condominiums

Any capital gains on the form are also reportable to the IRS. But if you sold your primary residence — don’t panic! Homeowners could exclude the capital gains tax from the sale of principal residences.

1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA

The distribution from a Form 1099-SA is usually tax-free because the income is from a tax-advantaged medical savings account.

Additionally, contributions to the account are generally deductible, and the unspent balances can roll indefinitely from tax year to tax year.

However, if the distribution is spent on non-qualified medical purchases, like ineligible HSA expenses, you will be subject to both income tax and a 20% tax penalty.

1099-SB: Seller’s Investment in Life Insurance Contract

Form 1099-SB is filed after 1099-LS (sale or transfer of a life insurance policy) has occurred. While the latter documents the purchase, 1099-SB documents the cost basis for the life insurance. Form 1099-SB is also issued if the policy is transferred to a foreign individual.

SSA-1099 isn’t necessarily an IRS form but you might need one to do your taxes.

The Social Security Administration issues SSA-1099s, which detail your benefits income. Social Security can be taxable but the extent depends on income and filing status.

Americans living abroad may receive Form SSA-1042S instead.

What to do if you don’t receive your IRS Form 1099

If you haven’t received your Form 1099, don’t panic. The deadline for issuers to file is January 31, so you probably won’t get yours electronically or in the mail until February 15.

But reach out to the issuer if you still don’t have one after that date.

If you can’t get a hold of a new copy, contact the IRS for help at 1-800-829-1040. You may need to provide the issuer’s information (name, address, phone number) as well as your contact information, including SSN.

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Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.