Difference in a 1099-DIV and a 1099-PATR

by Emma Watkins

    The Internal Revenue Service requires corporations, partnerships, individuals, estates and trusts to file certain forms -- known as information returns -- with the agency to disclose reportable income they paid during a fiscal year. The 1099 form series falls within that document category. In addition to providing the government with the payout information, those entities must also send 1099s to the individuals and organizations that received the income.

    Purpose

    The 1099-DIV is called the “Dividends and Distributions” form. Individuals who receive at least $10 in dividends, capital gains and nontaxable distributions in a tax period get a 1099-DIV around Jan. 31 of the following year. Taxpayers who earn $600 or more in income from liquidations also get the 1099-DIV in the mail. “Taxable Distributions Received from Cooperatives” is the IRS’ formal name for the 1099-PATR. Patrons of cooperatives that pay them $10 or more receive Form 1099-PATR during tax-preparation season.

    Filing Exceptions

    Taxpayers who earn life-insurance distributions and dividends from employees' stock-ownership plans do not receive Form 1099-DIV. Instead, the income is reported on the 1099-R. Investors who get an alternative form of payment in place of owed dividends do not receive a 1099-DIV in the mail, either. The exceptions affecting Form 1099-PATR do not impact the recipient taxpayers. Cooperative payments made to corporations, nonprofits and governments are exempt from receiving a 1099-PATR, but cooperative payments to individual patrons are not.

    Tax Reporting

    Payees receiving Form 1099-DIV see the federal income tax the payer withheld in Box 4 of the form. Box 6 shows the tax taken from dividends earned from foreign investments. Taxpayers also find the state tax deducted from their earnings in Box 14 of the 1099-DIV. Cooperative distributions, as reported in Form 1099-PATR, are subject to federal income tax backup withholding only. Patrons find the amount of tax deducted from their payment in Box 4.

    Credit Reporting

    Cooperative patrons might be eligible for different types of credits that reduce the tax they owe on earned distributions. Those credits appear in boxes 7 through 10 of the 1099-PATR. The 1099-DIV is for the reporting of distribution income only.

    About the Author

    Emma Watkins writes on finance, fitness and gardening. Her articles and essays have appeared in "Writer's Digest," "The Writer," "From House to Home," "Big Apple Parent" and other online and print venues. Watkins holds a Master of Arts in psychology.

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