Federal agencies are generally subject to the same information reporting requirements and must file information returns for each calendar year with respect to applicable payments made during the year in the course of its trade or business.
The payer must file Form 1099-MISC, Miscellaneous Income (PDF), Miscellaneous Income, for each person it paid at least $600 for rents, services (including parts and materials), prizes and awards, or other income. If payment for services includes amounts paid for labor and parts, include both amounts on the Form 1099-MISC.
Fines, Penalties and Other Amounts (1098-F)
Under Section 6050X, if the aggregate amount the taxpayer must pay pursuant to orders or agreements with respect to the violation of a law, or the investigation or inquiry into the violation or potential violation of a law, exceeds a minimum threshold amount, any government or entity involved in the related suits or agreements must file a Form 1098-F with the IRS, and provide the taxpayer the information reported on the Form. Information reporting will not be required under Section 6050X until the date specified in the proposed regulations.
Payments Under Contract - Section 6050M Reporting
Section 6050M provides that the head of every executive agency that enters into any contract shall make a return for each person with whom the agency entered into a contract during the calendar year. A Federal executive agency of the United States, as defined by 6050M(b), is any executive agency other the General Accounting Office, any military department and the United States Postal Service and Postal Rate Commission of the United States.
If you are required to submit the same contract information to the Federal Procurement Data System (FPDC) that is required by Forms 8596 and 8596-A (transmittal) then you may elect to have the FPDC file Forms 8596 and 8596-A on your behalf for contracts required to be reported to the FPDC. If you make the election, your agency must not file directly with the IRS to report those contracts required to be submitted to the FPDC. However, you must file with the IRS for any contracts that are required to be reported to the IRS but are not required to be submitted to the FPDC. See Form 8596 for instructions on how to make this election.
Special Information Reporting Rules
- Payments to Attorneys: Attorney fees of $600 or more paid during the year must be reported on Form 1099-MISC, box 7. This includes legal fees paid to corporations. This does not include gross proceeds paid to attorneys in connection with legal services in box 14.
- Vendor Services: Payments made by a federal executive agency for any type of vendor services must be reported on Form 1099-MISC, box 7.
- Payments Reportable to Corporations: Payments by federal agencies to corporations are not exempt from the filing requirements. Internal Revenue Code section 6041A(d)(3) provides that payments made for services performed by a corporation are subject to information reporting requirements when the remuneration has been paid to the corporation by a Federal executive agency.
- Student Loan Interest Statements: If student loan interest of $600 or more from an individual is received during the year, report this amount on Form 1098-E, Student Loan Interest Statement (PDF).
- 1099-R: Use Form 1099-R (PDF) to report distributions from certain pensions, annuities, retirement or profit-sharing plans in excess of $10 or more. For more information, see the Instructions for Form 1099-R (PDF).
Interest Income (1099-INT)
In general, a government entity must issue Form 1099-INT, Interest Income (PDF), to each person to whom it paid, during the calendar year:
$10 or more of interest on:
- Accounts in banks, credit unions, or similar organizations
- Tax credit bonds
- Bonds, including tax-exempt state or local government bonds
- U.S. savings bonds
$600 of interest on:
- Damage awards
- Income tax refunds
- Other payments made in the course of governmental operations
Interest of less than $600 on a tax refund may be reported with the refund on Form 1099-G. See the Instructions for Form 1099-G (PDF).
For more information on interest reporting, see the Instructions for Form 1099-INT and Form 1099-OID (PDF).
Certain Governmental Payments (1099-G)
A Federal agency must issue Form 1099-G, Certain Governmental Payments (PDF), to each person it made payments to during the calendar year, for:
- Agricultural payments
- Taxable Grants
- Alternative Trade Adjustment Assistance for Older Workers payments, and
- Market gain associated with the repayment of a Commodity Credit Corporation (CCC) loan
Federal agencies are subject to requirements to withhold income tax of 28% from certain payments if the payee is not exempt from backup withholding and fails to furnish a correct taxpayer identification number (TIN), or a notice is received from the IRS indicating that backup withholding should begin on a payee.
Note: Backup withholding does not apply to wages or pension payments.
All entities are required to comply with the backup withholding rules. However, some recipients are exempt from having backup withholding imposed on them. Do not apply backup withholding to any of the following entities:
- A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities.
- The United States or any of its agencies or instrumentalities.
- An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).
- A foreign government or any of its political subdivisions, agencies, or instrumentalities.
- An international organization or any of its agencies or instrumentalities.
For more information on information return filing requirements, refer to the General Instructions for Forms 1099, 1098, 5498, and W-2 G (PDF).