Where Would I Enter Information from a 1099-PATR for Farm Income?
When reporting farm income received from a cooperative, you may receive a Form 1099-PATR, Taxable Distributions Received From Cooperatives. This form is used by cooperatives to report patronage dividends and other distributions to their members. If you are a farmer or agricultural producer who received such distributions, you must report the information on your federal tax return.
How to Report 1099-PATR Information
- Box 1 – Patronage Dividends: This amount is generally reported as ordinary income on your Form 1040. You will enter this amount on Schedule E (Supplemental Income and Loss) if the distribution is from a cooperative that is not a partnership or S corporation. If the cooperative is a partnership or S corporation, the income may be reported on Schedule K-1, which is then reported on Schedule E.
- Box 2 – Nonpatronage Distributions: These are distributions from earnings derived from business done for the U.S. government or its agencies. These are also reported as ordinary income and typically go on Schedule E.
- Box 7 – Qualified Payments: For specified agricultural or horticultural cooperatives, this box reports qualified payments. These may relate to the Section 199A deduction (Qualified Business Income Deduction) and should be reported accordingly on Form 8995 or Form 8995-A.
- Box 8 – Section 199A(a) Qualified Items: This includes qualified items of income, gain, deduction, or loss from qualified trades or businesses that are not specified service trades or businesses (SSTBs). Report these amounts as part of your qualified business income for the Section 199A deduction.
- Box 9 – Section 199A(a) SSTB Items: If any of the reported items are from an SSTB (such as health, law, accounting services), they are reported separately in this box. These items are not eligible for the Section 199A deduction.
It is important to note that if you receive a Form 1099-PATR, you must report all amounts in the appropriate boxes on your tax return. The cooperative is required to file Form 1099-PATR if it paid at least $10 in patronage dividends or other distributions to you, or if federal income tax was withheld under backup withholding rules.
For guidance on how to enter Form 1099-PATR information in Online Taxes (OLT) software, you can navigate to the Federal section, then under Income, select "Show more" near Miscellaneous Income, and choose "Add or Edit" next to Income from 1099-PATR. Follow the on-screen instructions to input the data.
Source:
Instructions for Form 1099-PATR
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions before filing your tax return.