1099 Compass Update: Week of September 25, 2017

Gerry Nelligan
September 27, 2017

Changes to tax compliance requirements and legislation happen frequently at the state and IRS levels.  In order to provide customers with the updated and accurate information they need, Sovos documents each of these changes in its Compass portal. Here are some notable changes in 1099 reporting from this week.

IRS Releases 2018 Draft Form 1098-T, Tuition Statement

The IRS has released the 2018 Draft Form 1098-T. There are a couple of changes from the previous revision:

  • Box 2, “Amounts billed for qualified tuition and related expenses” has been removed
  • “FILER’S federal identification no.” and STUDENT’S taxpayer identification no.” has been changed to “FILER’S TIN” and “STUDENT’S TIN”

View the 2018 Draft Form 1098-T

IRS Releases Supplemental Instructions for Completing Form 1098 for Tax Year 2017

The IRS has released supplemental instructions for completing Form 1098 for Tax Year 2017. The supplemental instructions cover both Box 9 and Box 10.

Additional instructions for Box 9: If an APN or other such identifying number needed to complete box 9 is not readily available for the property (having no address) securing the mortgage, enter a description of the property, using metes and bounds if available, or other descriptive language, to properly identify the property. You may abbreviate as necessary.

Additional instructions for Box10: If only one property secures the mortgage, you may leave this box blank.  For purposes of determining the number of properties, you may consider any single physical street address, 911 address, lot, parcel, APN, or tract of land to be one property. If there is more than one property securing the mortgage, you may report the address of any one of the properties using boxes 8-9 and enter in box 10 the total number of properties securing the mortgage.”

View the supplemental instructions, please click the link below. 

IRS Releases 2018 Draft Form 1042-S

The IRS has released the 2018 Draft Form 1042-S. There are a number of changes from the previous revision of this form:

  • Box 9 has been renamed “Overwithheld tax repaid to recipient pursuant to adjustment procedure (see instructions)”
    • Previously “Tax paid by withholding agent”
  • Box 10 now has instructions in the box: “(Combine boxes 7a, 8, and 9)”
  • Box 11 has been renamed “Tax paid by withholding agent (amounts not withheld) (see instructions)”
  • Chapter 3 Exemption Codes list has been edited
    • Code 23, “Exempt under section 8979(I)” was added
    • Code 11, “QSL that assumes primary withholding responsibility” has been removed
  • Pooled Reporting Codes list has been edited
    • Codes that have been removed
      • Code 33, “Joint account withholding rate pool”
      • Code 36, “Qualifying dividend equivalent offsetting payments to U.S. person”
      • Code 37, “Nonqualifying divided equivalent payments to U.S. persons—Undisclosed”
      • Code 38, “Other qualifying dividend equivalent offsetting payments (ECI)”
  • Chapter 4 Status Code list edited
    • Edited Codes
      • Code 14 has been renamed “Certified Deemed-Compliant FFI—Investment Entity that does not maintain financial accounts”
    • New Codes
      • Code 17, “U.S. Branch—treated as U.S. person”
      • Code 18, “U.S. Branch—not treated as U.S. person (reporting under section 1471)”
  • LOB Code list edited
    • Code 1, “Individual” removed
  • Form 1042-S Footnotes have been edited
    • Footnote 9 now says, “Codes 27 and 32 should only be used by a QI, WP, or WT. A QI acting as a QDD may use code 27 or 28.”

View the 2018 Draft Form 1042-S, please click the link below.

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Gerry Nelligan

Gerry Nelligan is a Regulatory Analysis Supervisor at Sovos, leading a team of counsels covering information reporting, including 10-Series IRS reporting, Affordable Care Act (ACA) reporting and Automatic Exchange of Information (AEOI). Gerry received his J.D. from Suffolk University Law School and his B.A. from Providence College. He is a licensed attorney in the state of Massachusetts.
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