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General Instructions for Forms 1099, 1098, 5498, and W-2G - Introductory Material

Table of Contents

Reminders

Electronic Filing.   E-filers are reminded that using the FIRE system requires following the specifications contained in Pub. 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically. Also, the IRS does not provide a fill-in form option. See part F on page 5 for information on e-file.

Payee.   Throughout these instructions the term “payee”
means any recipient of Forms 1099, 1098, 5498, or W-2G including borrowers, debtors, donors, insureds, participants, policyholders, students, transferors, and winners on
certain forms.

Where to file.   All information returns filed on paper will be filed with only two Internal Revenue Service Centers: Austin, TX, and Kansas City, MO. See part D on page 4 and Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

What's New

tip
See the specific form instructions for more information on the changes listed below.

General Instructions for Forms 1099, 1098, 5498, and W-2G.
Where to file.   All information returns filed on paper must use a 3-line mailing address. See part D on page 4.

Use of magnetic media.   All references to magnetic media have been removed from these instructions, all specific instructions, and forms to which these instructions refer. Enterprise Computing Center-Martinsburg (ECC-MTB) will no longer accept tape cartridges for returns filed after December 1, 2008. After that date, electronic filing will be the only acceptable method for filing information returns with ECC-MTB. See part F on page 5.

Instructions for Form 1098.   The Mortgage Forgiveness Debt Relief Act of 2007 extended the requirement to report in box 4 qualified mortgage insurance premiums paid by the borrower through December 31, 2010.

Instructions for Form 1098-C.   Do not file Form 1098-C at the Internal Revenue Service Center at Ogden, UT, after December 31, 2007. All forms filed after December 31, 2007, should be filed at either the Austin, TX, center or the Kansas City, MO, center, depending on the location of your principal business, office, agency, or legal residence. See part D on page 4.

Instructions for Forms 1099-A and 1099-C.   Form 1099-C is not to be filed when fraudulent debt is cancelled due to identity theft and the debtor is not liable for the debt. Form 1099-C is to be used only for cancellations of debts for which the debtor is personally liable.

Form 1099-CAP.   We have removed the box 6 checkbox from Form 1099-CAP. Under Regulations section 1.367(a)-3 nonrecognition of losses is required for all reportable transactions from corporate inversions, making the checkbox unnecessary.

Instructions for Form 1099-CAP.   A TIP has been added under Who Must File to inform brokers of the sources of readily available public information for use in determining the broker's filing requirement. The instructions for box 6 have been removed.

Form 1099-DIV.   Box 7 may be blank as RICs no longer have to report this information to recipients.

Instructions for Form 1099-DIV.   

  • The capital gains rate for qualified dividends has generally been reduced to zero after December 31, 2007, for individuals whose other income is taxed at the 10% or 15% rate.

  • RICs meeting the requirements under final Regulations section 1.853-4 have new reporting requirements for boxes 6 and 7.

Instructions for Form 1099-MISC.   Revenue Ruling 2007-69 provides that payments made by the U.S. Department of Veterans Affairs under the compensated work therapy program are exempt from federal income tax as veterans' benefits and are no longer required to be reported on Form 1099-MISC.

Instructions for Form 1099-PATR.   

  • The Caution for box 6 has been revised to reflect the allowance under new final Regulations section 1.199-6. The allowance of the deduction at the entity level changes the tax treatment of the cooperative's deduction under section 1382.

  • Section 8211(a) of the U.S. Troop Readiness, Veterans Care, Katrina Recovery, and Iraq Accountability Act extended the work opportunity credit through August 31, 2011.

  • In the instructions for Box 10. Other Credits and Deductions, the reference to Form 8861, Welfare-To-Work Credit, has been deleted from the list of pass-through credits due to its repeal as a separate credit. Instead, qualified second-year wages are reported on Form 5884, Work Opportunity Credit. Also, the reference to Form 5884-A, Employee Retention Credit, which expired after 2006, has been deleted.

Instructions for Forms 1099-R and 5498.
Form 1099-R.   

  • A reference to the reporting requirements for eligible charitable distributions under section 408(d)(8) has been deleted due to expiration of the provision.

  • Permissible withdrawals from eligible automatic contribution arrangements have been added to the list of distributions that are not eligible rollover distributions. Specific reporting instructions for these permissible withdrawals have been added under Permissible Withdrawals under Section 414(w) .

  • Reporting instructions for qualified rollover contributions as defined in section 408A(e) have been added under Reporting a direct rollover .

  • A Caution has been added to the instructions for box 2a to notify filers to disregard the amount which may be excludible under section 402(l) as a distribution of payments for qualified health and long-term care insurance premiums for retired public safety officers when computing the taxable amount in box 2a.

  • Instructions for withholding on nonqualified distributions from designated Roth accounts have been added under Eligible rollover distribution; 20% withholding.

  • The following changes were made to the Guide to Distribution Codes.

    1. For Distribution Code 1, reference to the qualified reservist distribution under section 72(t)(2)(G) has been deleted due to expiration of the provision.

    2. An exception was added to Distribution Code 2 for distributions that are permissible withdrawals under an eligible automatic contribution arrangement under section 414(w).

    3. New Distribution Code H, Direct rollover of a designated Roth account distribution to a Roth IRA, has been added.

    4. Distribution Codes B and D are a valid combination
      for 2008.

Form 5498.   

  • A section has been added to direct filers to the IRS website for information on disaster relief available for presidentially declared disaster areas.

  • Somalia has been added to the list of locations in the designated combat zone for Enduring Freedom.

  • Instructions have been added for the reporting of qualified rollover contributions to Roth IRAs in box 2.

Instructions for Forms W-2G and 5754.   

  • Rev. Proc. 2007-57 informs sponsors of poker tournaments, including casinos, that payments of winnings of more than $5,000 are subject to the rules for regular gambling withholding and information reporting under section 3402(q) and its regulations for payments made on or after March 4, 2008.

  • Instructions for box 9 have been added informing issuers of the requirement to complete box 9 with the TIN of the person receiving the winnings. Failure to supply a correct TIN (SSN or ITIN) will result in backup withholding on the winnings.

  • Instructions for boxes 11 and 12 have been clarified to inform issuers (other than state lotteries) of the need to obtain 2 forms of identification from the person receiving the winnings as a means of verifying the recipient's SSN/ITIN, name, and address.

Items You Should Note

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST(1-800-843-5678) if you recognize a child.

Available Products

In addition to these general instructions, which contain general information concerning Forms 1099, 1098, 5498, and W-2G, we provide specific form instructions as separate products. Get the instructions you need for completing a specific form from the following list of separate instructions.

  • Instructions for Forms W-2G and 5754

  • Instructions for Form 1098

  • Instructions for Form 1098-C

  • Instructions for Forms 1098-E and 1098-T

  • Instructions for Forms 1099-A and 1099-C

  • Instructions for Form 1099-B

  • Instructions for Form 1099-CAP

  • Instructions for Form 1099-DIV

  • Instructions for Form 1099-G

  • Instructions for Form 1099-H

  • Instructions for Forms 1099-INT and 1099-OID

  • Instructions for Form 1099-LTC

  • Instructions for Form 1099-MISC

  • Instructions for Form 1099-PATR

  • Instructions for Form 1099-Q

  • Instructions for Forms 1099-R and 5498

  • Instructions for Form 1099-S

  • Instructions for Forms 1099-SA and 5498-SA

  • Instructions for Form 5498-ESA

See How To Get Forms, Publications, and Other Assistance on page 15.

Guide to Information Returns

See the chart on pages 17 and 18 for a brief summary of information return reporting rules.

Use Form 1096 To Send Paper Forms to the IRS

You must send Copies A of all paper Forms 1099, 1098, 5498, and W-2G to the IRS with Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Instructions for completing Form 1096 are contained on Form 1096. Also see part E on page 5.

Reporting Backup Withholding on Forms 1099 and W-2G

If you backup withhold on a payment, you must file the appropriate Form 1099 or Form W-2G with the IRS and furnish a statement to the recipient to report the amount of the
payment and the amount withheld. This applies even though the amount of the payment may be below the normal threshold for filing Form 1099 or Form W-2G. For how to report backup withholding, see part N on page 11.

Substitute Statements to Recipients

If you are using a substitute form to furnish statements to recipients (generally Copy B), be sure your substitute statements comply with the rules in Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S. Pub. 1179, which is revised annually, explains the requirements for format and content of substitute statements to recipients. If you are using a substitute form to furnish information to recipients, it must comply with the requirements in Pub. 1179. See part M on page 9 for additional information.

Caution
All substitute statements to recipients must contain
the tax year, form number, and form name prominently displayed together in one area of the statement. For example, they could be shown in the upper right part of the statement.

Taxpayer Identification Number (TIN) Matching

TIN Matching allows a payer or authorized agent who is required to file Forms 1099-B, DIV, INT, MISC, OID, and/or PATR, which report income subject to backup withholding, to match TIN and name combinations with IRS records before submitting the forms to the IRS. TIN Matching is one of the e-services products that is offered and is accessible through the IRS website. For program guidelines, see Pub. 2108A, e-Services On-Line TIN Matching Program, or go to www.irs.gov and enter keyword “TIN matching” in the upper right corner. It is anticipated that payers who validate the TIN and name combinations before filing information returns will receive fewer backup withholding (CP2100) “B” notices and penalty notices. E-services technical support is available by calling 1-866-255-0654, Monday through Friday, from 6:30 a.m. to 6:00 p.m., Central time.

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