Form 1099-PATR, Taxable Distributions Received from Cooperatives

If you have received distributions from co-operative societies, the IRS considers this as taxable income and expects its citizens to report this revenue in the IRS tax Form 1099- PATR. This is a tax form that helps taxpayers to report their income from less-familiar sources. Taxpayers will receive this Form from the co-operatives if they were paid at least $10 as dividends or other distributions from the co-operatives in the previous tax year. 

Apart from distributions the co-operatives also pay patronage dividends to their investors, depending on the profit proposition of the business. The information about this income will be reported in the tax return under the farming income or general business clause. 

Who receives Form 1099- PATR?

This IRS tax Form is generally associated with farms and reports dividend income that the members or investors receive as dividends from these cooperative farms. Those who have a federal income tax withheld in correspondence with the cooperative under the backup withholding clause can also receive this tax Form. 

This Form does not just report the dividend income of the taxpayers, but it also reports the share of the deductions and the tax code that is allowed by the cooperative to claim by the taxpayer. This Form should be furnished to the recipients by January 31st and should be e-filed with the IRS by March 31st, each year. The due date for paper filing this 1099  tax Form with the IRS is February 28th, 2022.

A cooperative that is engaged in retail sales of goods and services that are meant for personal use and family use of its members, is generally exempt from filing Form 1099- PATR. 

Information to be entered in Form 1099- PATR

This tax Form like all other IRS Forms will include the taxpayer identification number, SSN, the EIN, and the taxpayer identification numbers. The Form also includes the account number of the taxpayer and the amount they were paid.

The Form will also include the details of the name of the farmer’s cooperatives and will include the share of allocations that were paid in cash. The Form might also include information on the share of deductions the co-operative allows under code section 199A(g). Here is the complete split-up of Form 1099- PATR

Box 1: Patronage dividends

Box 2: Non-patronage distributions

Box 3: Retain allocations per unit

Box 4: Federal income tax withheld

Box 5: Redeemed non-qualified notices

Box 6: Section 199 A(g) reductions

Box 7: Qualified payments section 199 A(b)(7)

Box 8: Section 199A (a) qualified items

Box 9: Section 100A (a) SSTB items

Box 10: Investment credit

Box 11: Work opportunity credit

Box 12: Other credits and deductions

IRS Form 1099- PATR is an important Form that helps taxpayer to report their cooperative and business income on their tax return. It comprises specific information that should be reported correctly under the prescribed categories. A certified tax filing agency can help in filing these Forms without errors and within the due date with the IRS. With Tax2efile, you can schedule that date when your tax forms should be transmitted to the IRS and thus prevents delays and penalties by all means. 

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