1099 misc season, form 1099 misc filing on form1099online.com

Taxpayer dislike getting IRS Form 1099. Organizations dislike sending them out. Truth be told, maybe nobody likes IRS Forms 1099 aside from the IRS. The duty office adores them since they effortlessly permit the coordinating of information against government forms. Here are key certainties you have to think about IRS Forms 1099. By and large, organizations must issue the structures to any payee (other than an enterprise) who gets $600 or all the more during the year. What’s more, that is recently the fundamental edge lead; there are numerous, numerous exemptions.

This form 1099 misc data will be reported to the IRS in view of your Social Security number paying little heed to whether you get the form 1099 Misc. Update your address specifically with payers, and in addition putting a sending request in with the U.S. Post Office. You’ll need to perceive any structures the IRS sees. Any Form 1099 sent to you goes to the IRS as well. The due date is Jan. 31 for mailing 1099s to recipients; however the payer (more often than not) has until the finish of February to send all its 1099s to the IRS. This year (2017, for 2016 tax year payments), the IRS has anticipated the reporting date for Forms 1099-MISC filing non-employee pay in box 7. The reporting (paper or electronic) date to the IRS will now be the same as the due date for the form 1099 to be issued to recipients, January 31.

This due date applies whether the form 1099 misc are reporting electronically or on paper. Previously, filers had an additional month or two in the after issuing the form 1099s to recipients, yet no more. Note, in any case, that the reporting form 1099 dates stay unaltered for Forms 1099-MISC that don’t report in box 7. That implies as a rule there is still an (appreciated) time delay. The time delay implies you may have an opportunity to correct errors.

form 1099 misc efile for 2016

1099-MISC is one of Form 1099 used to report miscellaneous income. One notable use of Form 1099-MISC is to report amounts paid with a business (including nonprofits) to a non-corporate US resident independent contractor for services such payments are nonemployee compensation). The ubiquity of form 1099 has also  to use of the phrase “1099 workers” or “the 1099economy” to to the independent  themselves. Other uses of Form 1099-MISC include (local rental, rental and nightly rental) income, royalties.

The form is issued by the payer (e. g. business) due to the recipient (e. g. contractor) by January 31, the IRS by the last day March, for box 7 deadline January 31st, each year for work done during the previous tax year. The payer has to file form 1099 electronically with the IRS the deadline for filing with the IRS is March and for box  7 deadline January 31st.

form 1099 misc for tax year 2016

Every Payer must complete a Form 1099-MISC for each covered transaction.

Payer should complete or prepare 4 copies of Form 1099-MISC:

One for the payer,

One for the payee,

One for the IRS,

And one for the State Tax Department, if required.

Payers who file 250 or more form 1099-misc forms must file all of the 1099 forms electronically with the IRS. If the fewer than 250 requirement is met payers can e file 1099 forms with IRS or can paper copies are filed.

If payer selects paper copies of 1099 forms filing option, the IRS also requires the payer to submit a copy of Form 1096, which is a summary of information forms being sent to the IRS.

The returns must be filed with the IRS by on or before January 31, 2017, when reporting nonemployee compensation payments in box 7. Otherwise, it should be e-filed by March 31, 2017 

Form 1099-misc recipient copies of the returns must be sent to payees by the end of January.

The law provides various dollar amounts under which no Form 1099-misc reporting requirement is imposed. For some variants of Form 1099, for example, no filing is required for payees who receive less than $600 from the payer during the applicable year. For Form 1099-MISC in particular, businesses are required to submit a Form 1099-misc for every contractor paid more than $600 for services during a year. This requirement usually does not apply to corporations receiving payments.

Form 1099-MISC is to be filed on or before January 31, 2017, when reporting nonemployee compensation payments in box 7. Otherwise, it should be e-filed by March 31, 2017.

E-filing 1099 forms on form1099online.com is simple, easy and cost effective. Form1099online.com is approved by IRS as their certified e-file service provider & tax partner. You can E-file IRS Forms 1099-MISC within 5 Minutes.

form 1099 misc deadline changed

In an effort to combat fraud, The Protecting Americans from Tax Hikes (PATH) Act of 2015, was passed by Congress and signed by President Obama in December. The act revises the filing deadline for Form W-2 and certain types of Form 1099.

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What’s Changing?
Until now, employers had two dates to keep in mind when remitting W-2’s:
•     January 31, to provide employee copies, and
•    February 28, for paper filings submitted to the Social Security Administration (March 31 for electronic filings)
Beginning with 2017 tax season for filing tax year 2016 1099 forms, employers will now have one filing deadline for all Federal W-2s, January 31. This is true for both employee and agency copies, or whether filing paper or electronic returns.
What happens to Form 1099-Misc?
The new January 31 deadline applies to certain types of 1099s. If you’re filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you will need to meet the new filing deadline of January 31.
If you don’t have amounts in Box 7, then the deadline remains February 28 for paper filings or March 31 for electronic filings.

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form 1099 misc failure to file penalties

Penalties for failure to file correct information returns and/or to furnish correct payee statements have increased and are now subject to inflationary adjustments. Information returns and payee statements include, for example, Forms 1098, 1099, W-2G and W-2.

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Per Section 208 of Public Law (P.L.) 113-295, effective for information returns required to be filed in a calendar year beginning after 2014, the base penalty rates and maximum penalties are subject to annual inflationary increases. Section 806 of P.L. 114-27 increased the base penalties for failure to file correct information returns and provide correct payee statements for returns required to be filed after December 31, 2015.

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Employers must send Copy A of Form(s) 1098, 1099, W-2G and other information returns to the Internal Revenue Service with transmittal Form 1096 by the last day of February of the following year if filing by paper, March 31 if filing electronically. Copy A of Form(s) W-2 must be sent to the Social Security Administration with transmittal Form W-3 by the last day of February of the following year if filing by paper, March 31 if filing electronically. In addition, employers filing 250 or more information returns must file electronically unless granted a waiver by the IRS.

Beginning with the 2016 tax year, the due dates for filing Forms W-2 and W-3 with SSA will be January 31 of the following year, whether you file using paper forms or electronically. Form 1099-MISC will be due to the IRS by January 31 of the following year when you’re reporting non-employee compensation payments in box 7. Otherwise, file by February 28 if filing by paper, March 31 if filing electronically.form 1099

Employers must furnish Copy B and any other applicable copies of information returns to the employee by January 31 of the following year. Penalties, information returns and payee statements are discussed in the General Instructions for Certain Information Returns and General Instructions for Forms W-2 and W-3.

The penalty rates and maximums for failure to file correct information returns and/or to furnish correct payee statements, including inflationary adjustments if applicable, are reflected in the following two tables (*-as adjusted for inflation):

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Large Businesses with Gross Receipts of More Than $5 Million and Governmental Entities
Time returns filed/furnished Returns due 01-01-2011 thru 12-31-2015 Returns due 01-01-16 thru 12-31-2016 Returns due 01-01-17 thru 12-31-2017
Not more than 30 days late
(by March 30 if the due date is February 28)
$30 per return/
$250,000 maximum
$50 per return/
$529,500* maximum
$50 per return/
$532,000* maximum
31 days late – August 1 $60 per return/
$500,000 maximum
$100 per return/
$1,589,000* maximum
$100 per return/
$1,596,500* maximum
After August 1 or Not At All $100 per return/
$1,500,000 maximum
$260* per return/
$3,178,500* maximum
$260 per return/
$3,193,000* maximum
Intentional Disregard $250 per return/
No limitation
$520* per return/
No limitation
$530* per return/
No limitation

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Small Businesses with Gross Receipts $5 Million or Less
Time returns filed/furnished Returns due 01-01-2011 thru 12-31-2015 Returns due 01-01-16 thru 12-31-2016 Returns due 01-01-17 thru 12-31-2017
Not more than 30 days late
(by March 30 if the due date is February 28)
$30 per return/
$75,000 maximum
$50 per return/
$185,000* maximum
$50 per return/
$186,000* maximum
31 days late – August 1 $60 per return/
$200,000 maximum
$100 per return/
$529,500* maximum
$100 per return/
$532,000* maximum
After August 1 or Not At All $100 per return/
$500,000 maximum
$260* per return/
$1,059,500* maximum
$260 per return/
$1,064,000* maximum
Intentional Disregard $250 per return/
No limitation
$520* per return/
No limitation
$530* per return/
No limitation

Penalties for Failure to File Correct Information Returns (Code Section 6721) may apply if you:

  • don’t file a correct information return by the due date and a reasonable cause is not shown,
  • file on paper when you were required to file electronically,
  • fail to report a Taxpayer Identification Number (TIN),
  • report an incorrect TIN, or
  • fail to file paper forms that are machine readable.

Penalties for Failure to Furnish Correct Payee Statements (Code Section 6722) may apply if:

  • you don’t provide a correct payee statement by the applicable date and a reasonable cause isn’t shown,
  • all required information isn’t shown on the statement, or
  • incorrect information is included on the statement.

The amount of the penalty is based on when you file the correct information return or furnish the correct payee statement. A penalty for failure to file a correct information return is separate from the penalty for failure to furnish the correct payee statement. For example, if you fail to file a correct Form 1099-MISC with the IRS and don’t provide a correct Form 1099-MISC statement to the payee, you may be subject to two separate penalties.

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2016 Instructions for Forms 1099-R

File Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans, any individual retirement arrangements (IRAs), annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc.

Also, report on Form 1099-R death benefit payments made by employers that are not made as part of a pension, profit-sharing, or retirement plan. See Box 1, later.

Reportable disability payments made from a retirement plan must be reported on Form 1099-R.

Generally, do not report payments subject to withholding of social security and Medicare taxes on this form. Report such payments on Form W-2, Wage and Tax Statement. Generally, do not report amounts totally exempt from tax, such as workers’ compen

sation and Department of Veterans Affairs (VA) payments. However, if part of the distribution is taxable and part is nontaxable, report the entire distribution in box 1 and the taxable part in box 2a when known.

Box 1. Gross Distribution

Enter the total amount of the distribution before income tax or other deductions were withheld. Include direct rollovers, IRA direct payments to accepting employer plans, premiums paid by a trustee or custodian for the cost of current life or other insurance protection, including a recharacterization and a Roth IRA conversion. Also include in this box distributions to plan participants from governmental section 457(b) plans. However, in the case of a distribution by a trust representing certificates of deposit (CDs) redeemed early, report the net amount distributed. Also, see Box 6, later.

Include in this box the value of U.S. Savings Bonds distributed from a plan. Enter the appropriate taxable amount in box 2a. Furnish a statement to the plan participant showing the value of each bond at the time of distribution. This will provide him or her with the information necessary to figure the interest income on each bond when it is redeemed.

Include in box 1 amounts distributed from a qualified retirement plan for which the recipient elects to pay health insurance premiums under a cafeteria plan or that are paid directly to reimburse medical care expenses incurred by the recipient (see Rev. Rul. 2003-62 on page 1034 of Internal Revenue Bulletin 2003-25 at http://www.irs.gov/pub/irsirbs/irb03-25.pdf). Also include this amount in box 2a.

Include in box 1 charges or payments for qualified long-term care insurance contracts under combined arrangements. Enter Code W in box 7.

In addition to reporting distributions to beneficiaries of deceased employees, report here any death benefit payments made by employers that are not made as part of a pension, profit-sharing, or retirement plan. Also enter these amounts in box 2a; enter Code 4 in box 7.

For section 1035 exchanges that are reportable on Form 1099-R, enter the total value of the contract in box 1, 0 (zero) in box 2a, the total premiums paid in box 5, and Code 6 in box 7.

Designated Roth account distributions. If you are making a distribution from a designated Roth account,

enter the gross distribution in box 1, the taxable portion of the distribution in box 2a, the basis included in the distributed amount in box 5, any amount allocable to an IRR made within the previous 5 years (unless an exception to section 72(t) applies) in box 10, and the first year of the 5-taxable-year period for determining qualified distributions in box 11. Also, enter the applicable code(s) in box 7

Employer securities and other property. If you distribute employer securities or other property, include in box 1 the FMV of the securities or other property on the date of distribution. If there is a loss, see Losses, later.

If you are distributing worthless property only, you are not required to file Form 1099-R. However, you may file and enter 0 (zero) in boxes 1 and 2a and any after-tax employee contributions or designated Roth contributions in box 5.

Charitable gift annuities. If cash or capital gain property is donated in exchange for a charitable gift annuity, report the total amount distributed during the year in box 1. See Charitable gift annuities under Box 3, later.

FFIs reporting in a manner similar to section 6047(d). If you are a participating FFI electing to report with respect to a cash value insurance contract or annuity contract that is a U.S. account held by a specified U.S. person in a manner similar to section 6047(d), include in box 1 any amount paid under the contract during the reporting period (that is, the calendar year or the year ending on the most recent contract anniversary date).

TAXABLE AMOUNT

Generally, you must enter the taxable amount in box 2a. However, if you are unable to reasonably obtain the data needed to compute the taxable amount, leave this box blank. Do not enter excludable or tax-deferred amounts reportable in boxes 5, 6, and 8. Enter 0 (zero) in box 2a for:

A direct rollover (other than an IRR) from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to another such plan or to a traditional IRA;

A direct rollover from a designated Roth account to a Roth IRA;

A traditional, SEP, or SIMPLE IRA directly transferred to an accepting employer plan;

An IRA recharacterization;

A nontaxable section 1035 exchange of life insurance, annuity, endowment or long-term care insurance contracts; orA nontaxable charge or payment, for the purchase of a qualified long-term care insurance contract, against the cash value of an annuity contract or the cash surrender value of a life insurance contract.

Annuity starting date in 1998 or later. If you made annuity payments from a qualified plan under section 401(a), 403(a), or 403(b) and the annuity starting date is in 1998 or later, you must use the simplified method under section 72(d)(1) to figure the taxable amount. Under this method, the expected number of payments you use to figure the taxable amount depends on whether the payments are based on the life of one or more than one person. See Notice 98-2, 1998-1 C.B. 266, and Pub. 575, Pension and Annuity Income, to help you figure the taxable amount to enter in box 2a.

Annuity starting date after November 18, 1996, and before 1998. Under the simplified method for figuring the taxable amount, the expected number of payments is based only on the primary annuitant’s age on the annuity starting date. See Notice 98-2.

Annuity starting date before November 19, 1996. If you properly used the rules in effect before November 19, 1996, for annuities that started before that date, continue to report using those rules. No changes are necessary

Corrective distributions. Enter in box 2a the amount of excess deferrals, excess contributions, or excess aggregate contributions (other than employee contributions or designated Roth contributions). See Corrective Distributions, earlier.

Cost of current life insurance protection. Include current life insurance protection costs (net premium costs) that were reported in box 1. However, do not report these costs and a distribution on the same Form 1099-R. Use a separate Form 1099-R for each. For the cost of current life insurance protection, enter Code 9 in box 7.

DVECs. Include DVEC distributions in this box. Also see Deductible Voluntary Employee Contributions (DVECs), earlier

Designated Roth account. Generally, a distribution from a designated Roth account that is not a qualified distribution is taxable to the recipient under section 402 in the case of a plan qualified under section 401(a), under section 403(b)(1) in the case of a section 403(b) plan, and under section 457(a)(1)(A) in the case of a governmental section 457(b) plan. For purposes of section 72, designated Roth contributions are treated as employer contributions as described in section 72(f)(1) (that is, as includible in the participant’s gross income). Examples. Participant A received a nonqualified distribution of $5,000 from the participant’s designated Roth account. Immediately before the distribution, the participant’s account balance was $10,000, consisting of $9,400 of designated Roth contributions and $600 of earnings. The taxable amount of the $5,000 distribution is $300 ($600/$10,000 x $5,000). The nontaxable portion of the distribution is $4,700 ($9,400/$10,000 x $5,000). The issuer would report on Form 1099-R:

.Box 1, $5,000 as the gross distribution;

.Box 2a, $300 as the taxable amount;

.Box 4, $60 ($300 x 20%) as the withholding on the earnings portion of the distribution;

.Box 5, $4,700 as the designated Roth contribution basis (nontaxable amount);

.Box 7, Code B; and

.The first year of the 5-taxable-year period in box 11.

.Using the same facts as in the example above, except that the distribution was a direct rollover to a Roth IRA, the issuer would report on Form 1099-R:

.Box 1, $5,000 as the gross distribution;

.Box 2a, 0 (zero) as the taxable amount;

.Box 4, no entry; Box 5, $4,700 as the designated Roth contribution basis (nontaxable amount);

.Box 7, Code H; and The first year of the 5-taxable-year period in box 11.

Losses. If a distribution is a loss, do not enter a negative amount in this box. For example, if an employee’s 401(k) account balance, consisting solely of stock, is distributed but the value is less than the employee’s remaining after-tax contributions or designated Roth contributions, enter the value of the stock in box 1, leave box 2a blank, and enter the employee’s contributions or designated Roth contributions in box 5.

For a plan with no after-tax contributions or designated Roth contributions, even though the value of the account may have decreased, there is no loss for reporting purposes. Therefore, if there are no employer securities distributed, show the actual cash and/or FMV of property distributed in boxes 1 and 2a, and make no entry in box 5.If only employer securities are distributed, show the FMV of the securities in boxes 1 and 2a and make no entry in box 5 or 6. If both employer securities and cash or other property are distributed, show the actual cash and/or FMV of the property (including employer securities) distributed in box 1, the gross less any NUA on employer securities in box 2a, no entry in box 5, and any NUA in box 6.

Roth IRA. For a distribution from a Roth IRA, report the total distribution in box 1 and leave box 2a blank except in the case of an IRA revocation or account closure and a recharacterization, earlier. Use Code J, Q, or T as appropriate in box 7. Use Code 8 or P, if applicable, in box 7 with Code J. Do not combine Code Q or T with any other codes.

However, for the distribution of excess Roth IRA contributions, report the gross distribution in box 1 and only the earnings in box 2a. Enter Code J and Code 8 or P in box 7.

Roth IRA conversions. Report the total amount converted from a traditional IRA, SEP IRA, or SIMPLE IRA to a Roth IRA in box 2a. Check the “Taxable amount not determined” box in box 2b. A conversion is considered a distribution and must be reported even if it is with the same trustee and even if the conversion is done by a trustee-to-trustee transfer. When an individual retirement annuity described in section 408(b) is converted to a Roth IRA, the amount that is treated as distributed is the FMV of the annuity contract on the date the annuity contract is converted. This rule also applies when a traditional IRA holds an annuity contract as an account asset and the traditional IRA is converted to a Roth IRA. Determining theFMV of an individual retirement annuity issued by a company regularly engaged in the selling of contracts depends on the timing of the conversion as outlined in Q/ A-14 of Regulations section 1.408A-4.

For a Roth IRA conversion, use Code 2 in box 7 if the participant is under age 591 2 or Code 7 if the participant is at least age 591 2. Also check the IRA/SEP/SIMPLE box in box 7.

Traditional, SEP, or SIMPLE IRA. Generally, you are not required to compute the taxable amount of a traditional, SEP, or SIMPLE IRA nor designate whether any part of a distribution is a return of basis attributable to nondeductible contributions. Therefore, except as provided below or elsewhere in these instructions, report the total amount distributed from a traditional, SEP, or SIMPLE IRA in box 2a. This will be the same amount reported in box 1. Check the “Taxable amount not determined” box in box 2b.

.For a distribution by a trust representing CDs redeemed early, report the net amount distributed. Do not include any amount paid for IRA insurance protection in this box.

. For a distribution of contributions plus earnings from an IRA before the due date of the return under section 408(d) (4), report the gross distribution in box 1, only the earnings in box 2a, and enter Code 8 or P, whichever is applicable, in box 7. Enter Code 1 or 4 also, if applicable.

.For a distribution by a trust representing CDs redeemed early, report the net amount distributed. Do not include any amount paid for IRA insurance protection in this box.

.For a distribution of contributions plus earnings from an IRA before the due date of the return under section 408(d) (4), report the gross distribution in box 1, only the earnings in box 2a, and enter Code 8 or P, whichever is applicable, in box 7. Enter Code 1 or 4 also, if applicable.

.For a distribution of excess contributions without earnings after the due date of the individual’s return under section 408(d)(5), leave box 2a blank, and check the “Taxable amount not determined” box in box 2b. Use Code 1 or 7 in box 7 depending on the age of the participant.

For an amount in a traditional IRA or a SEP IRA paid directly to an accepting employer plan, or an amount in a SIMPLE IRA paid directly to an accepting employer plan after the 2-year period (see section 72(t)(6)), enter the gross amount in box 1, 0 (zero) in box 2a, and Code G in box 7.

Box 2b. Taxable Amount Not Determined

Enter an “X” in this box if you are unable to reasonably obtain the data needed to compute the taxable amount.

In addition, enter an “X” in this box if you are an FFI reporting in box 1 to satisfy your chapter 4 reporting requirement under the election described in Regulations section 1.1471-4(d)(5)(i)(B).

If you check this box, leave box 2a blank; but see Traditional, SEP, or SIMPLE IRA on this page. Except for IRAs, make every effort to compute the taxable amount.

Box 2b. Total Distribution Enter an “X” in this box only if the payment shown in box 1 is a total distribution. A total distribution is one or more distributions within 1 tax year in which the entire balance of the account is distributed. If periodic or installment payments are made, mark this box in the year the final payment is made.

Box 3. Capital Gain (Included in Box 2a) If any amount is taxable as a capital gain, report it in box 3.

Charitable gift annuities. Report in box 3 any amount from a charitable gift annuity that is taxable as a capital gain. Report in box 1 the total amount distributed during the year. Report in box 2a the taxable amount. Advise the annuity recipient of any amount in box 3 subject to the 28% rate gain for collectibles and any unrecaptured section 1250 gain. Report in box 5 any nontaxable amount. Enter Code F in box 7. See Regulations section 1.1011-2(c), Example 8.

Special rule for participants born before January 2, 1936 (or their beneficiaries). For lump-sum distributions from qualified plans only, enter the amount in box 2a eligible for the capital gain election under section 1122(h)(3) of the Tax Reform Act of 1986 and section 641(f)(3) of the Economic Growth and Tax Relief Reconciliation Act of 2001. Enter the full amount eligible for the capital gain election. You should not complete this box for a direct rollover.

To compute the months of an employee’s active participation before 1974, count as 12 months any part of a calendar year in which an employee actively participated under the plan; for active participation after 1973, count as 1 month any part of a month in which the employee actively participated under the plan. See the Example below.

Active participation begins with the first month in which an employee became a participant under the plan and ends with the earliest of:

.The month in which the employee received a lump-sum distribution under the plan;

.For an employee, other than a self-employed person or owner-employee, the month in which the employee separates from service;

.The month in which the employee dies; or

.For a self-employed person or owner-employee, the first month in which the employee becomes disabled within the meaning of section 72(m)(7).

Box 4. Federal Income Tax Withheld

Enter any federal income tax withheld. This withholding under section 3405 is subject to deposit rules and the withholding tax return is Form 945. Backup withholding does not apply. See Pub. 15-A, Employer’s Supplemental Tax Guide, and the Instructions for Form 945 for more withholding information.

Even though you may be using Code 1 in box 7 to designate an early distribution subject to the 10% additional tax specified in section 72(q), (t), or (v), you are not required to withhold that tax.

To determine your withholding requirements for any designated distribution under section 3405, you must first determine whether the distribution is an eligible rollover distribution. See Direct Rollovers, earlier, for a discussion of eligible rollover distributions. If the distribution is not an eligible rollover distribution, the rules for periodic payments or nonperiodic distributions apply. For purposes of withholding, distributions from any IRA are not eligible rollover distributions.

Eligible rollover distribution; 20% withholding. If an eligible rollover distribution is paid directly to an eligible retirement plan in a direct rollover, do not withhold federal income tax. If any part of an eligible rollover distribution is not a direct rollover, you must withhold 20% of the partthat is paid to the recipient and includible in gross income. This includes the earnings portion of any nonqualified designated Roth account distribution that is not directly rolled over. The recipient cannot claim exemption from the 20% withholding but may ask to have additional amounts withheld on Form W-4P, Withholding Certificate for Pension or Annuity Payments. If the recipient is not asking that additional amounts be withheld, Form W-4P is not required for an eligible rollover distribution because 20% withholding is mandatory.

Employer securities and plan loan offset amounts that are part of an eligible rollover distribution must be included in the amount multiplied by 20%. However, the actual amount to be withheld cannot be more than the sum of the cash and the FMV of property (excluding employer securities and plan loan offset amounts). For example, if the only part of an eligible rollover distribution that is not a direct rollover is employer securities or a plan loan offset amount, no withholding is required. However, unless otherwise exempt, any cash that is paid in the distribution must be used to satisfy the withholding on the employer securities or plan loan offset amount.

Depending on the type of plan or arrangement, the payer or, in some cases, the plan administrator is required to withhold 20% of eligible rollover distributions from a qualified plan’s distributed annuity and on eligible rollover distributions from a governmental section 457(b) plan. For additional information, see section 3405(d) and Regulations sections 35.3405-1T, A-13; and 31.3405(c)-1, Q/A 4 and 5. For governmental section 457(b) plans only, see Notice 2003-20.

Any NUA excludable from gross income under section 402(e)(4) is not included in the amount of any eligible rollover distribution that is subject to 20% withholding.

You are not required to withhold 20% of an eligible rollover distribution that, when aggregated with other eligible rollover distributions made to one person during the year, is less than $200.

IRAs. The 20% withholding does not apply to distributions from any IRA, but withholding does apply to IRAs under the rules for periodic payments and nonperiodic distributions. For withholding, assume that the entire amount of a distribution from an IRA other than a Roth IRA is taxable (except for the distribution of contributions under section 408(d)(4), in which only the earnings are taxable, and section 408(d)(5), as applicable). Generally, Roth IRA distributions are not subject to withholding except on the earnings portion of excess contributions distributed under section 408(d)(4).

An IRA recharacterization is not subject to income tax withholding.

Periodic payments. For periodic payments that are not eligible rollover distributions, withhold on the taxable part as though the periodic payments were wages, based on the recipient’s Form W-4P. The recipient may request additional withholding on Form W-4P or claim exemption from withholding. If a recipient does not submit a Form W-4P, withhold by treating the recipient as married with three withholding allowances. See Circular E, Employer’s Tax Guide (Pub. 15), for wage withholding tables.

Nonperiodic distributions. Withhold 10% of the taxable part of a nonperiodic distribution that is not an eligible rollover distribution. In most cases, designated distributions from any IRA are treated as nonperiodic distributions subject to withholding at the 10% rate even if the distributions are paid over a periodic basis. See Regulations section 35.3405-1T, Q/A F-15. The recipient may request additional withholding on Form W-4P or claim exemption from withholding.

Failure to provide TIN. For periodic payments and nonperiodic distributions, if a payee fails to furnish his or her correct TIN to you in the manner required, or if the IRS notifies you before any distribution that the TIN furnished is incorrect, a payee cannot claim exemption from withholding. For periodic payments, withhold as if the payee was single claiming no withholding allowances. For nonperiodic payments, withhold 10%. Backup withholding does not apply.

Box 5. Employee Contributions/Designated Roth Contributions or Insurance Premiums

Enter the employee’s contributions, designated Roth contributions, or insurance premiums that the employee may recover tax free this year (even if they exceed the box 1 amount). The entry in box 5 may include any of the following: (a) designated Roth contributions or contributions actually made on behalf of the employee over the years under the plan that were required to be included in the income of the employee when contributed (after-tax contributions), (b) contributions made by the employer but considered to have been contributed by the employee under section 72(f), (c) the accumulated cost of premiums paid for life insurance protection taxable to the employee in previous years and in the current year under Regulations section 1.72-16 (cost of current life insurance protection) (only if the life insurance contract itself is distributed), and (d) premiums paid on commercial annuities. Do not include any DVECs, elective deferrals, or any contribution to a retirement plan that was not an after-tax contribution.

Generally, for qualified plans, section 403(b) plans, and nonqualified commercial annuities, enter in box 5 the employee contributions or insurance premiums recovered tax free during the year based on the method you used to determine the taxable amount to be entered in box 2a. On a separate Form 1099-R, include the portion of the employee’s basis that has been distributed from a designated Roth account. See the Examples in the instructions for box 2a, earlier.

If periodic payments began before 1993, you are not required to, but you are encouraged to, report in box 5.

If a total distribution is made, the total employee contributions or insurance premiums available to be recovered tax free must be shown only in box 5. If any previous distributions were made, any amount recovered tax free in prior years must not appear in box 5.

If you are unable to reasonably obtain the data necessary to compute the taxable amount, leave boxes 2a and 5 blank, and check the first box in box 2b.

For more information, see Rev. Proc. 92-86, 1992-2 C.B. 495 and section 72(d).

For reporting charitable gift annuities, see Charitable gift annuities, earlier.

Box 6. Net Unrealized Appreciation (NUA) in Employer’s Securities

Use this box if a distribution from a qualified plan (except a qualified distribution from a designated Roth account) includes securities of the employer corporation (or a subsidiary or parent corporation) and you can compute the NUA in the employer’s securities. Enter all the NUA in employer securities if this is a lump-sum distribution. If this is not a lump-sum distribution, enter only the NUA in employer securities attributable to employee contributions. See Regulations section 1.402(a)-1(b) for the determination of the NUA. Also see Notice 89-25, Q/ A-1, 1989-1 C.B. 662. Include the NUA in box 1 but not in box 2a except in the case of a direct rollover to a Roth IRA (see Notice 2009-75, Q/A 1). You do not have to complete this box for a direct rollover.

Box 7. Distribution Code(s)

Enter an “X” in the IRA/SEP/SIMPLE checkbox if the distribution is from a traditional IRA, SEP IRA, or SIMPLE IRA. Do not check the box for a distribution from a Roth IRA or for an IRA recharacterization.

Enter the appropriate code(s) in box 7. Use the Guide to Distribution Codes, later, to determine the appropriate code(s) to enter in box 7 for any amounts reported on Form 1099-R. Read the codes carefully and enter them accurately because the IRS uses the codes to help determine whether the recipient has properly reported the distribution. If the codes you enter are incorrect, the IRS may improperly propose changes to the recipient’s taxes.

When applicable, enter a numeric and an alpha code. For example, when using Code P for a traditional IRA distribution under section 408(d)(4), you must also enter Code 1, if it applies. For a normal distribution from a qualified plan that qualifies for the 10-year tax option, enter Codes 7 and A. For a direct rollover to an IRA or a qualified plan for the surviving spouse of a deceased participant, or on behalf of a nonspouse designated beneficiary, enter Codes 4 and G (Codes 4 and H if from a designated Roth account to a Roth IRA). If two or more distribution codes are not valid combinations, you must file more than one Form 1099-R.

1099-R. For example, if part of a distribution is premature (Code 1) and part is not (Code 7), file one Form 1099-R for the part to which Code 1 applies and another Form 1099-R for the part to which Code 7 applies. In addition, for the distribution of excess deferrals, parts of the distribution may be taxable in 2 different years. File separate Forms 1099-R using Code 8 or P to indicate the year the amount is taxable.

Even if the employee/taxpayer is age 591 2 or over, use Code 1 if a series of substantially equal periodic payments was modified within 5 years of the date of the first payment (within the meaning of section 72(q)(3) or (t)(4)), if you have been reporting distributions in previous years using Code 2

. For example, Mr. B began receiving payments that qualified for the exception for part of a series of substantially equal periodic payments under section 72(t) (2)(A)(iv) when he was 57. When he was 61, Mr. B modified the payments. Because the payments were modified within 5 years, use Code 1 in the year the payments were modified, even though Mr. B is over 591 2.

If you do not know that the taxpayer meets the requirements for substantially equal periodic payments under section 72(t)(2)(A)(iv), use Code 1 to report the payments.

If part of a distribution is paid in a direct rollover and part is not, you must file a separate Form 1099-R for each part showing the appropriate code on each form.

Governmental section 457(b) plan distributions. Generally, a distribution from a governmental section 457(b) plan is not subject to the 10% additional tax under section 72(t). However, an early distribution from a governmental section 457(b) plan of an amount that is attributable to a rollover from another type of eligible retirement plan or IRA is subject to the additional tax as if the distribution were from a plan described in section 401(a). See section 72(t)(9). If the distribution consists solely of amounts that are not attributable to such a rollover, enter Code 2 in box 7. If the distribution consists solely of amounts attributable to such a rollover, then enter the appropriate code in box 7 as if the distribution were from a plan described in section 401(a). If the distribution is made up of amounts from both sources, you must file separate Forms 1099-R for each part of the distribution unless Code 2 would be entered on each form.

Box 8. Other

Enter the current actuarial value of an annuity contract that is part of a lump-sum distribution. Do not include this item in boxes 1 and 2a.To determine the value of an annuity contract, show the value as an amount equal to the current actuarial value of the annuity contract, reduced by an amount equal to the excess of the employee’s contributions over the cash and other property (not including the annuity contract) distributed.

If an annuity contract is part of a multiple recipient lump-sum distribution, enter in box 8, along with the current actuarial value, the percentage of the total annuity contract each Form 1099-R represents

. Also, enter in box 8 the amount of the reduction in the investment (but not below 0 (zero)) against the cash value of an annuity contract or the cash surrender value of a life insurance contract due to charges or payments for qualified long-term care insurance contracts.

Box 9a. Your Percentage of Total Distribution

If this is a total distribution and it is made to more than one person, enter the percentage received by the person whose name appears on Form 1099-R. You need not complete this box for any IRA distributions or for a direct rollover.

Box 9b. Total Employee Contributions

You are not required to enter the total employee contributions or designated Roth contributions in box 9b. However, because this information may be helpful to the recipient, you may choose to report them. If you choose to report the total employee contributions or designated Roth contributions, do not include any amounts recovered tax free in prior years. For a total distribution, report the total employee contributions or designated Roth contributions in box 5 rather than in box 9b.

Box 10. Amount Allocable to IRR Within 5 Years

Enter the amount of the distribution allocable to an IRR made within the 5-year period beginning with the first day of the year in which the rollover was made. Do not complete this box if an exception under section 72(t) applies.

For further guidance on determining amounts allocable to an IRR, see Notice 2010-84, Q/A-13.

Box 11. 1st Year of Desig. Roth Contrib.

Enter the first year of the 5-taxable-year period. This is the year in which the designated Roth account was first established by the recipient.

Boxes 12–17. State and Local Information

These boxes and Copies 1 and 2 are provided for your convenience only and need not be completed for the IRS. Use the state and local information boxes to report distributions and taxes for up to two states or localities. Keep the information for each state or locality separated by the broken line. If state or local income tax has been withheld on this distribution, you may enter it in boxes 12 and 15, as appropriate. In box 13, 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 16, enter the name of the locality. In boxes 14 and 17, you may enter the amount of the state or local distribution. Copy 1 may be used to provide information to the state or local tax department. Copy 2 may be used as the recipient’s copy in filing a state or local income tax return.

2016 Instructions for Form 1099-PATR

File Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person to whom the cooperative has paid at least $10 in patronage dividends and other distributions described in section 6044(b) or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment. A cooperative determined to be primarily engaged in the retail sale of goods or services that are generally for personal, living, or family use of the members may ask for and receive exemption from filing Form 1099-PATR. See Form 3491, Consumer Cooperative Exemption Application, for information about how to apply for this exemption. Report dividends paid on a cooperative’s capital stock on Form 1099-DIV, Dividends and Distributions.

Exceptions. Generally, you are not required to file Form 1099-PATR for payments made to a corporation, a tax-exempt organization including tax-exempt trusts (HSAs, Archer MSAs, and Coverdell ESAs), the United States, a state, a possession, or the District of Columbia. See Regulations section 1.6044-3(c).

Statements to Recipients If you are required to file Form 1099-PATR, you must furnish a statement to the recipient. For more information about the requirement to furnish statements to recipients, see part M in the 2016 General Instructions for Certain Information Returns.

Truncating recipient’s identification number on payee statements. Pursuant to Treasury Regulation section 301.6109-4, all filers of this form may truncate a payee’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 filer’s identification number may not be truncated on any form. See part J in the 2016 General Instructions for Certain Information Returns.

Box 1. Patronage Dividends

Enter the total patronage dividends paid in cash (qualified or “consent” checks), qualified written notices of allocation (face amount), and other property (except nonqualified written notices of allocation).

Box 2. Nonpatronage Distributions

This box applies only to farmers’ cooperatives exempt from tax under section 521. Enter the total nonpatronage distributions paid in cash (qualified or “consent” checks), qualified written notices of allocation (face amount), and other property. Don’t include nonqualified written notices of allocation.

Box 3. Per-Unit Retain Allocations

Enter the total per-unit retain allocations paid in cash, qualified per-unit retain certificates (face amount), and other property.

Box 4. Federal Income Tax Withheld Enter backup withholding.

For example, persons who have not furnished their TIN to you in the manner required are subject to withholding at a 28% rate on payments required to be reported in boxes 1, 2, 3, and 5 to the extent such payments are in cash or qualified check. See Regulations section 31.3406(b)(2)-5 for more information on backup withholding by cooperatives.

Box 5. Redemption of Nonqualified Notices and Retain Allocations

For farmers’ cooperatives qualifying under section 521 only, enter all redemptions of nonqualified written notices of allocation issued as patronage dividends or nonqualified written notices of allocation issued as nonpatronage allocations. Also enter nonqualified per-unit retain certificates issued with respect to marketing.

Pass-Through Credits and Deductions Report in the appropriate boxes the patron’s share of unused credits and deductions that the cooperative is passing through to the patron.

Box 6. Domestic Production Activities Deduction

Deduction for domestic production activities income. Section 199(d)(3) and Regulations section 1.199-6 provide special rules for cooperatives to pass through, if elected, to their patrons receiving certain patronage dividends or certain per-unit retain allocations from the cooperative a deduction equal to their portion of the cooperative’s qualified production activities income (QPAI) that would be deductible by the cooperative and have been designated by the cooperative in a written notice mailed to its patrons during the payment period specified under section 1382(d). The deduction for QPAI applies to any cooperative that is engaged in the manufacturing, producing, growing, or extracting in whole or significant part of any agricultural or horticultural product, or the marketing of agricultural or horticultural products.

If any amount of a patronage dividend or qualified per-unit retain allocation is passed through to a patron, and such amount is allocable to QPAI that is deductible under section 199(a), then the amount is reported in box 6. However, if no written notice (see later) was sent within the payment period or if the cooperative does not pass through the deduction to the patron, leave box 6 blank.

To determine the portion of the cooperative’s QPAI that would be deductible, the cooperative’s taxable income is computewithout taking into account any deduction allowable under section 1382(b) or (c) relating to patronage dividends, per-unit retain allocations, and nonpatronage distributions. In the case of a cooperative engaged in the marketing of agricultural or horticultural products (or both), the cooperative is treated as having manufactured, produced, grown, or extracted in whole or in significant part any qualifying production property marketed by the cooperative that its patrons have manufactured, produced, grown, or extracted. Agricultural or horticultural products also include fertilizer, diesel fuel, and other supplies used in agricultural or horticultural production that are manufactured, produced, grown, or extracted by the cooperative.

Box 7. Investment Credit

Enter the total investment credit for the patron.

Box 8. Work Opportunity Credit

Enter the total work opportunity credit for the patron.

Box 9. Patron’s AMT Adjustment

Enter the total alternative minimum tax (AMT) patronage dividend adjustment for the patron.

Box 10. Other Credits and Deductions

For the patron, state separately in box 10 the type and amount of each of the following credits and deductions.

.The cellulosic biofuel fuels credit (including second generation biofuel) (Form 6478).

.The renewable electricity, refined coal, and Indian coal production credit (Form 8835).

.The empowerment zone credit (Form 8844). The Indian employment credit (Form 8845).

.The biodiesel and renewable diesel fuels credit (Form 8864).

.The low sulfur diesel fuel production credit (Form 8896).

.The credit for small employer health insurance premiums (Form 8941).

.The credit for employer differential wage payments (Form 8932).

.The deduction for capital costs incurred by small refiner cooperatives when complying with EPA sulfur regulations.

2016 Instructions for form 1099-MISC

 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:

1. rents (box 1);

2. services performed by someone who is not your employee (including parts and materials), box 7;

3. prizes and awards (see instructions for boxes 3 and 7);

4. other income payments (box 3);

5. medical and health care payments (box 6);

6. crop insurance proceeds (box 10);

7. cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish (box 7);

8. generally, the cash paid from a notional principal contract to an individual, partnership, or estate (box 3);

9. Payments to an attorney. See Payments to attorneys, later; or

10. 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.

Box 1. Rents

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. 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.

Box 2. Royalties

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

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.

Box 3. Other Income

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.

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.

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

1. Payments as explained earlier under Deceased employee’s wages.

2. Payments as explained earlier under Indian gaming profits, payments to tribal members.

3. A payment or series of payments made to individuals for participating in a medical research study or

4. 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.

a. The payments are received from an insurance company because of services performed as an insurance salesperson for the company.

b. The payments are received after termination of the salesperson’s agreement to perform services for the company.

c. The salesperson did not perform any services for the company after termination and before the end of the year

. d. The salesperson enters into a covenant not to compete against the company for at least 1 year after the date of termination.

e. 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.

f. 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.

5. 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):

a. Received on account of personal physical injuries or physical sickness;

b. That do not exceed the amount paid for medical care for emotional distress;

c. 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

d. 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.

Foreign agricultural workers. 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. If you are an FFI reporting pursuant to an election described in Regulations section 1.1471-4(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

Box 4. Federal Income Tax Withheld

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 2016 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.

Box 5. Fishing Boat Proceeds

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.

Box 6. Medical and Health Care Payments

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.

Box 7. Nonemployee Compensation

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 CAUTION ! 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 http://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.

You made payments to the payee of at least $600 during the year.

IIIstrated example

1099misc-form-page

Self-employment tax. 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.

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. 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. A parachute payment is any payment that meets all of the following conditions.

1. The payment is in the nature of compensation.

2. The payment is to, or for the benefit of, a disqualified individual.

3. 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).

4. 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 http://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 http://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 the box 13 reporting instructions.

For employee reporting of these payments, see Pub. 15-A.

Payments not reported in box 7. Do not report in box 7:

expense reimbursements paid to volunteers of non-profit organizations;

deceased employee wages paid in 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 and prizes (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).

Box 8. Substitute Payments in Lieu of Dividends or Interest

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 http://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.

Box 9. Payer Made Direct Sales of $5,000 or More

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. -8- Instructions for 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.

Box 10. Crop Insurance Proceeds

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.

Box 13. Excess Golden Parachute Payments

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.

Box 14. Gross Proceeds Paid to an Attorney

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.

Box 15a. Section 409A Deferrals

You do not have to complete this box. For details, see Notice 2008-115, available at http://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.

Box 15b. Section 409A

Income 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 http://www.irs.gov/irb/2008-51_IRB/ ar12.html; Notice 2008-115; Notice 2010-6, which is available at http://www.irs.gov/irb/2010-03_IRB/ar08.html; and Notice 2010-80, available at http://www.irs.gov/irb/2010-51_IRB/ ar08.html.

The amount included in box 15b is also includible in box 7

Boxes 16–18. State Information

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 Pub. 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

2016 Instructions for Form 1099-INT

File Form 1099-INT, Interest Income, for each person

1. To whom you paid amounts reportable in boxes 1, 3, and 8 of at least $10 (or at least $600 of interest paid in the course of your trade or business described in the instructions for Box 1. Interest Income, later),

2. For whom you withheld and paid any foreign tax on interest, or

3. From whom you withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment.

Report only interest payments made in the course of your trade or business including federal, state, and local government agencies and activities deemed nonprofit, or for which you were a nominee/middleman. Report tax-exempt interest that is not original issue discount (OID) on Form 1099-INT. You do not need to report tax-exempt interest that is OID. Report interest that is taxable OID in box 1 or 8 of Form 1099-OID, Original Issue Discount, not on Form 1099-INT. Report exempt-interest dividends from a mutual fund or other regulated investment company (RIC) on Form 1099-DIV.

Exceptions to reporting. No Form 1099-INT must be filed for payments made to exempt recipients or for interest excluded from reporting.

Box 1. Interest Income

Enter interest not included in box 3. Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person’s account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, homestead associations, credit unions, or similar organizations. Include interest on bank deposits, accumulated dividends paid by a life insurance company, indebtedness (including bonds, debentures, notes, and certificates other than those of the U.S. Treasury) issued in registered form or of a type offered to the public, or amounts from which you withheld federal income tax or foreign tax. In addition, report interest of $10 or more attributable to a TIH of a WHFIT, or accrued by a real estate mortgage investment conduit (REMIC), a financial asset securitization investment trust (FASIT) regular interest holder, or paid to a collateralized debt obligation (CDO) holder, as explained later.

Also include interest of $600 or more paid in the course of your trade or business not meeting the above criteria, such as interest on delayed death benefits paid by a life insurance company, interest received with damages, interest on a state or federal income tax refund, or interest attributable to certain notional principal contracts with nonperiodic payments. See Regulations section 1.446-3T(g)(4).

Include in box 1 any accrued qualified stated interest on bonds sold between interest dates (or on a payment date). Also show OID on short-term obligations of 1 year or less and interest on all bearer certificates of deposit.

Do not include in box 1 interest on tax-free covenant bonds or dividends from money market funds (which are reportable on Form 1099-DIV). Do not include any description in box 1

Interest to holders of tax credit bonds. Report tax credits in amounts of $10 or more allowed from the following tax credit bonds.

.Clean renewable energy bonds.

.New clean renewable energy bonds.

• Qualified energy conservation bonds.

• Qualified zone academy bonds.

• Qualified school construction bonds.

• Build America bonds (Tax Credit).

Treat these amounts as paid on the credit allowance date. The credit allowance dates are March 15, June 15, September 15, December 15, and the last day on which the bond is outstanding. For bonds issued during the 3-month period ending on a credit allowance date and for bonds which are redeemed or mature, the amount of the credit is determined ratably based on the portion of the 3-month period during which the bond is outstanding.

Generally, interest paid is not required to be reported to the list of recipients below. However, if they are holders of the tax credit bonds listed above, the interest must be reported.

.A corporation.

.A dealer in securities or commodities required to register as such under the laws of the United States, a state, the District of Columbia, or a possession of the United States.

.A real estate investment trust (REIT) as defined in section 856.

.An entity registered at all times during the tax year under the Investment Company Act of 1940.

.A common trust fund as defined in section 584(a).

.Any trust which is exempt from tax under section 664(c).

Box 2. Early Withdrawal Penalty

Enter interest or principal forfeited because of an early withdrawal of time deposits, such as an early withdrawal from a certificate of deposit (CD), that is deductible from gross income by the recipient. Do not reduce the amount reported in box 1 by the amount of the forfeiture. For detailed instructions for determining the amount of forfeiture deductible by the depositor, see Rev. Ruls. 75-20, 1975-1 C.B. 29, and 75-21, 1975-1 C.B. 367.

Box 3. Interest on U.S. Savings Bonds and Treas. Obligations

Enter interest on U.S. Savings Bonds, Treasury bills, Treasury notes, and Treasury bonds. Do not include in box 1.

If you make payment on a U.S. Savings Bond or other U.S. obligation on which interest is reportable, enter your name, address, and federal identification number on Form 1099-INT and Form 1096, Annual Summary and Transmittal of U.S. Information Returns, not those of the U.S. Treasury Department or the Bureau of Public Debt.

Box 4. Federal Income Tax Withheld

Enter backup withholding. For example, if a recipient does not furnish its TIN to you in the manner required, you must backup withhold at a 28% rate on payments required to be reported in box 1 (which may be reduced by the amount reported in box 2), box 3, and box 8 on this form.

For information on requesting the recipient’s TIN, see part J in the 2016 General Instructions for Certain Information Returns.

Box 5. Investment Expenses

For single-class REMICs only, see Box 5. Investment Expenses under Rules for REMICs, FASITs, and Issuers of CDOs, later.

Box 6. Foreign Tax Paid

Enter any foreign tax paid on interest.Report this amount in U.S. dollars.

Box 7. Foreign Country or U.S. Possession

Enter the name of the foreign country or U.S. possession for which the foreign tax was paid and reported in box 6.

Box 8. Tax-Exempt Interest

Enter interest of $10 or more that is credited or paid to the person’s account if that interest is used to finance government operations and is issued by a state, the District of Columbia, a U.S. possession, an Indian tribal government, or their political subdivisions, or qualified volunteer fire departments. A political subdivision may include port authorities, toll road commissions, utility services authorities, and community redevelopment agencies. Include in box 8 any accrued qualified stated interest on these bonds sold between interest dates (or on a payment date).

Any exempt-interest dividends from a mutual fund or other RIC are reported on Form 1099-DIV.

No information reporting for tax-exempt OID under section 6049 will be required until such time as the IRS and Treasury provide future guidance.

Include specified private activity bond interest in box 9 and in the total for box 8. See the instructions for box 9, next.

Box 9. Specified Private Activity Bond Interest

Enter interest of $10 or more from specified private activity bonds. Generally, “specified private activity bond” means any private activity bond defined in section 141 and issued after August 7, 1986. See section 57(a)(5) for more details. Also see the Instructions for Form 6251, Alternative Minimum Tax—Individuals, available at http://www.irs.gov/form6251.

Box 10. Market Discount

For a taxable or tax-exempt covered security acquired with market discount, if the taxpayer notified you that a section 1278(b) election was made, enter the amount of market discount that accrued on the debt instrument during the tax year in the amount of $10 or more. For more details, see Regulations section 1.6045-1(n). Also see TD 9616, available at http://www.irs.gov/irb/2013-20_IRB/ ar07.html. Unless the taxpayer notified you that the taxpayer did not make a section 1276(b) election, use the constant yield method described in section 1276(b)(2) to determine the accruals of market discount for the debt instrument. See Regulations section 1.6045-1T(n)(11)(i) (B). For a taxable covered security with original issue discount, report the accruals of market discount on Form 1099-OID rather than on Form 1099-INT. For a tax-exempt covered security with original issue discount and no qualified stated interest (for example, a zero coupon debt instrument), you are not required to report the accruals of market discount in this box or on Form 1099-OID.

Box 11. Bond Premium

For a taxable covered security acquired at a premium, enter the amount of bond premium amortization allocable to the interest paid during the tax year, unless you were notified in writing that the holder did not want to amortize bond premium under section 171. See Regulations sections 1.6045-1(n)(5) and 1.6049-9(b). If you are required to report bond premium amortization and you reported a net amount of interest in box 1, leave this box blank.

Box 12. Bond Premium on U.S. Treasury Obligations

For a U.S. Treasury obligation that is a covered security, enter the amount of bond premium amortization allocable to the interest paid during the tax year, unless you were notified in writing that the holder did not want to amortize bond premium under section 171. See Regulations sections 1.6045-1(n)(5) and 1.6049-9(b). If you are required to report bond premium amortization and you reported a net amount of interest in box 3, leave this box blank.

Box 13. Bond Premium on Tax-Exempt Bond

For a tax-exempt covered security acquired at a premium, enter the amount of bond premium amortization allocable to the interest paid during the tax year. If you reported a net amount of interest in box 8 or 9, whichever is applicable, leave this box blank.

Box 14. Tax-Exempt and Tax Credit Bond CUSIP No.

For single bonds or accounts containing a single bond, enter the CUSIP number of the tax-exempt bond for which tax-exempt interest is reported in box 8 or tax credit bond (including build America bond and specified tax credit bond) for which a tax credit or taxable interest, as applicable, is reported in box 1. Enter the CUSIP number of the bond for which interest was paid or tax credit was allowed. If the tax-exempt interest or the tax credit is reported in the aggregate for multiple bonds or accounts, enter “various.”

Boxes 15–17. State Information

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 17. In box 15, enter the abbreviated name of the state, and in box 16, enter the payer’s state identification number. The state number is the payer’s identification number assigned by the individual state.

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.

Rules for Widely Held Fixed Investment Trusts (WHFITs) Trustees and middlemen must report the gross amount of interest attributable to the TIH for the calendar year on Form 1099-INT if that amount exceeds $10. If the trustee provides WHFIT information using the safe harbor rules in Regulations section 1.671-5(f)(1) or (g)(1), the trustee or middleman must determine the amounts reported on Form 1099-INT under Regulations section 1.671-5(f)(2) or (g)(2), as appropriate.

Requirement to furnish a tax information statement to the TIH. A tax information statement that includes the information provided to the IRS on Form 1099-INT, as well as additional information identified in Regulations section 1.671-5(e) must be provided to TIHs. The written tax information statement must be furnished to the TIH by March 15. The amount of an item of a trust expense that is attributable to a TIH must be included on the tax information statement provided to the TIH and is not required to be included in box 5 on the Form 1099-INT.

WHFIT interest income information may be included in summary totals reported to the IRS and the TIH. Information about WHFIT interest income may also be included in a composite statement furnished to the TIH.

For more filing requirements, see the 2016 General Instructions for Certain Information Returns.

2016 Instructions for Form 1099-K

Specific Instructions A payment settlement entity (PSE) must file Form 1099-K, Payment Card and Third Party Network Transactions, for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.

A PSE is a domestic or foreign entity that is a merchant acquiring entity, that is, a bank or other organization that has the contractual obligation to make payment to participating payees in settlement of payment card transactions; or a third party settlement organization (TPSO), that is, the central organization that has the contractual obligation to make payments to participating payees of third party network transactions.

Note. Healthcare networks, in-house accounts payable departments, and automated clearing houses do not qualify as TPSOs and do not report under section 6050W.

A participating payee is any person, including any governmental unit (and any agency or instrumentality of a governmental unit) who accepts a payment card, or any account number or other indicia associated with a payment card, as payment or accepts payment from a TPSO in settlement of a third party network transaction.

A payment card is any card, including any stored-value card (having prepaid value, including gift cards), issued according to an agreement or arrangement that provides for all of the following.

.One or more issuers of the cards.

.A network of persons unrelated to each other, and to the issuer, who agree to accept the cards as payment.

.Standards and mechanisms for settling the transactions between the merchant acquiring entities and the persons who agree to accept the cards as payment.

Box 1a. Gross Payment Card/Third Party Network Transactions

Enter in box 1a the gross amount of the total reportable payment card/third party network transactions for the calendar year. Gross amount means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollaamount of each transaction is determined on the date of the transaction.

Exception for de minimis payments. A TPSO is required to report any information concerning third party network transactions of any participating payee only if for the calendar year:

.The gross amount of total reportable payment transactions exceeds $20,000, and

.The total number of such transactions exceeds 200.

For examples of reportable payment transactions, including responsible filing parties, see Regulations section 1.6050W-1(e).

Box 1b. Card Not Present Transactions

Enter in box 1b the gross amount of the total reportable payment card/third party network transactions for the calendar year where the card was not present at the time of the transaction or the card number was keyed into the terminal. Typically, this relates to online sales, phone sales, or catalogue sales. Gross amount means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.

Box 2. Merchant Category Code

Enter the 4-digit merchant category code (MCC) used by the payment card industry to classify the payee for the payment card transactions reported on this Form 1099-K. If you or the entity on whose behalf you are filing uses an industry classification system other than, or in addition to, MCCs, assign to each payee an MCC that most closely corresponds to the description of the payee’s business. Note. If you or the entity on whose behalf you are filing is a TPSO or does not use any industry classification system for its payees, you should not complete this box.

If a payee has receipts classified under more than one MCC, you may either:

.File separate Forms 1099-K reporting the gross receipts for each MCC,or

. File a single Form 1099-K reporting total gross receipts and the MCC which corresponds to the largest portion of the total gross receipts.

Box 3. Number of Payment Transactions

Enter the number of payment transactions (not including refund transactions) processed through the payment card/ third party payer network.

Box 4. Federal Income Tax Withheld

Enter backup withholding. Persons who have not furnished their taxpayer identification number to you in the manner required are subject to backup withholding on payments required to be aggregately reported in box 1a.

A payment made by a TPSO is a reportable payment potentially subject to section 3406 backup withholding only if the payee has received payment from the TPSO in more than 200 transactions (the monetary threshold is not considered for this purpose) within a calendar year. Thereare no limiting thresholds for payments made in settlement of payment card transactions that are subject to section 3406 backup withholding.

For more information on backup withholding, including the applicable rate, see part N in the 2016 General Instructions for Certain Information Returns.

Boxes 5a Through 5l

Enter in the appropriate box the gross amount of the total reportable payment transactions for each month of the calendar year.

Boxes 6 Through 8. State Information

These boxes may be used by filers who participate in the Combined Federal/State Filing Program and/or who are required to file paper copies of this form with a state taxdepartment. 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 8. In box 6, enter the abbreviated name of the state. In box 7, enter the filer’s state identification number. The state number is the filer’s identific

ation number assigned by the individual state.

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 payee for use in filing the payee’s state income tax return.