Farm Income - 1099-PATR and Agricultural Program Payments
When reporting farm income, especially from cooperatives, Form 1099-PATR plays a crucial role. This form is used by agricultural cooperatives to report taxable distributions received by patrons, including patronage dividends and other payments. Understanding how to properly report these payments ensures compliance with IRS regulations and accurate tax filing.
What is Form 1099-PATR?
Form 1099-PATR, titled "Taxable Distributions Received From Cooperatives," is required to be filed by cooperatives that have paid at least $10 in patronage dividends or other distributions to a patron, or if federal income tax was withheld under backup withholding rules. This form is specifically designed for cooperatives, including farmers’ cooperatives exempt under section 521.
Key Boxes on Form 1099-PATR
- Box 1: Patronage Dividends – Reports the patron’s share of total patronage dividends paid in cash, qualified written notices of allocation, or other property (excluding nonqualified written notices) allowable as a deduction under section 1382(b)(1).
- Box 2: Nonpatronage Distributions – For farmers’ cooperatives exempt under section 521, this box reports distributions paid on a patronage basis from earnings derived from business done for the United States or any agency thereof.
- Box 7: Qualified Payments – For specified agricultural and horticultural cooperatives, this box reports qualified payments paid to the patron, required for section 199A(g) deduction reporting.
- Box 8: Section 199A(a) Qualified Items – Reports qualified items of income, gain, deduction, or loss from qualified trades or businesses that are not specified service trades or businesses (SSTBs).
- Box 9: Section 199A(a) SSTB Items – Reports qualified items from SSTBs, such as health, law, or accounting services.
- Box 10: Investment Credit – Reports the patron’s share of total investment credit.
- Box 11: Work Opportunity Credit – Reports the patron’s share of total work opportunity credit.
- Box 12: Other Credits and Deductions – Includes credits like empowerment zone employment credit, low sulfur diesel fuel production credit, small employer health insurance premiums credit, and employer differential wage payments credit.
- Box 13: Specified Cooperatives – Check if reporting as a specified agricultural or horticultural cooperative under section 199A(g)(4)(A).
Reporting Requirements
Cooperatives must file Form 1099-PATR for each person to whom they have paid at least $10 in patronage dividends or other distributions. Exceptions include payments to corporations, tax-exempt organizations (including HSAs, Archer MSAs, and Coverdell ESAs), the United States, states, possessions, or the District of Columbia.
Additionally, cooperatives must furnish a statement to recipients. Copy B of Form 1099-PATR is available as an online fillable PDF for easier distribution.
Agricultural Program Payments
Agricultural program payments are typically reported separately and may not be included in Form 1099-PATR. These payments are often government subsidies or support programs and are generally reported on Form 1099-NEC or other relevant forms depending on the nature of the payment. Always consult IRS guidelines for specific reporting requirements.
Filing Deadlines and Compliance
Cooperatives must file Form 1099-PATR by February 28 (or March 31 if filing electronically) for the previous tax year. Failure to comply may result in penalties. Ensure all information is accurate and matches the IRS TIN Matching System requirements.
Source:
Form 1099-PATR Instructions
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions before filing your tax return.