Mastering Form 1099-DIV: The Essential Guide

Form 1099-DIV is used by banks and other financial institutions to report dividend income and other distributions, such as stock or capital gains. They are completed for each person who has been paid dividends and other distributions on stock of $10 or more.

There are circumstances where someone might receive a Form 1099-DIV; there are situations where someone may not receive a form. Use our guide “Who receives a Form 1099-DIV?” to find out more information about this.

Image of Form 1099-DIV
Image of Form 1099-DIV, Dividends and Distributions – Copy A

What information is reported on Form 1099-DIV?

The left side of the form has boxes for the names, addresses, and TINs for both the Payer and the Recipient. It also has a checkbox for both the FATCA filing requirement and 2nd TIN notice.

The right side of the form has boxes for a variety of dividends and distributions amounts, as well as federal and state withholding amounts.

Review what information is required using our companion article, Gathering Information to Prepare Form 1099-DIV.

Who needs to file Form 1099-DIV with the IRS?

Form 1099-DIV should be filed for each person:

  • To whom you have paid dividends (including capital gain dividends and exempt-interest dividends) and other distributions valued at $10 or more in money or other property
  • For whom you have withheld and paid any foreign tax on dividends and other distributions on stock
  • For whom you have withheld any federal income tax on dividends under the backup withholding rules, or
  • To whom you have paid $600 or more in money or other property as part of a liquidation

Who needs to file Form 1099-DIV with the state?

Along with the federal filing and furnishing requirements, many states have individual requirements as well.

If you’ve chosen to e-File using the IRS FIRE (Filing Information Returns Electronically) system and enrolled in the Combined Federal/State Filing Program (CF/SF), any applicable forms will be forwarded to the corresponding states.

Some states have additional requirements that the CF/SF program doesn’t fulfill. It’s important to always verify that your state and form type support the CF/SF program and to see if any additional action is required on your end to meet state requirements.

When is the deadline to file with the IRS?

Traditionally, the filing deadlines for Forms 1099-DIV are as follows:

  • Furnish Recipient Copies – January 31st
  • Submit a Paper Filing – February 28th
  • Submit an Electronic Filing – March 31st

If these deadlines fall on a weekend or legal holiday, then the due date is typically the following business day. Check out our annually updated deadlines article for the most up-to-date information.

Can I submit a paper filing?

Employers may choose to paper file their Form 1099-DIV filing to the IRS if their total form count is less than the 250-form threshold. E-filing is encouraged by the IRS, but if you have less than 250 forms to file, then paper filing is an option.

When choosing to mail in forms, make sure to include an IRS transmittal Form 1096 and only Copy A of the 1099-DIV. If you are wondering why there are so many copies, but only Copy A gets sent to the IRS, check out File and Distribute Form 1099.

Determining where to send your filing is dependent upon the filer’s address, specifically the state. Find your state in the graphic below to get the correct IRS mailing address for your filing.

Mail In Form 1096 & 1099 by State
Mail-In Form 1096 & 1099 by State

Can I download Form 1099-DIV?

If you are looking to download a copy of the form to distribute to your recipients, then yes, you can download a PDF version of this form from the IRS website. This copy can be completed and printed out to furnish to recipients only.

It is important to note that this copy is not sufficient for paper filing. When submitting a paper filing, the forms are scanned by a machine which requires that the actual form meet certain requirements, such as being printed with special red ink. We recommend ordering forms directly from the IRS to ensure that you are submitting the correct type of form.

Using unofficial forms can result in fines and penalties against the business, even if the filing was mailed on time with accurate information.

How is the mailable 250-form threshold calculated?

Businesses reporting less than 250 forms may opt to mail in Copy A directly to the IRS. It’s important to note that paper filing is a slower process, while e-Filing is much faster AND recommended by the IRS.

The 250-form threshold applies to each form type separately. For example, a business filing 200 Forms 1099-MISC and 200 Forms 1099-A will still fall under the 250-form threshold because each type is counted independently. However, if one type of form is above the 250-form threshold, then that type must be sent electronically.

Similar to how the 250-form threshold is calculated, no form type shares the same cumulative form counts – even original forms and corrections are counted separately. For example, a business that reported 500 Forms 1099-MISC is required to e-File because the form count is over 250. Considering that an e-File has a quicker turnaround time, the IRS may return 50 forms that need a correction. In this case, the business may choose to file these 50 corrections via mail, because these 50 forms now fall under the 250-form e-File threshold.

Although, it’s important to note that the IRS generally recommends filing the corrections using the same medium as the original forms. If you e-filed the original forms, then you should e-file the corrections and vice versa if the original forms were paper filed.

IRS Mail in Threshold
How to calculate the IRS mail-in threshold

What are the requirements for paper filing?

The following is a short list of requirements for filing via mail:

  • Handwritten forms are accepted but must be legible for machine processing
  • Data must be in the middle of blocks
  • Do not use “$” for reporting amounts
  • Do not use “0” or “None” for blank reporting
  • Do not staple or fold forms

Please note that this is just a sample. There are entire publications filled with requirements that businesses must follow when filing forms with the IRS. Paper filing can be cumbersome, so we recommend finding an e-Filing software provider.

Due to the extensive requirements that must be followed for the filing to be accepted, we do not recommend sending forms by mail.

Can I submit a filing electronically?

Yes, of course! E-filing is encouraged by the IRS and offers many benefits. These benefits include immediate submission, quick turnaround time, status updates, and more.

E-filing can be a requirement for some filers. If filing more than 250 forms 1099-DIV, then you must submit your filing electronically.

If choosing to submit your filing electronically, be sure to find an authorized Form 1099-DIV software provider to make e-filing quick and easy!

What are the penalties for not filing or filing late?

If you are required to file these information returns and fail to file by the due date, then you may be subject to the following penalties:

  • $50 per information return if you correctly file within 30
    • Maximum penalty $588,500 per year
  • $110 per information return if you correctly file more than 30 days after the due date but by August 1;
    • Maximum penalty $1,766,000 per year
  • $290 per information return if you file after August 1 or you do not file required information returns;
    • Maximum penalty $3,532,500 per year

IRS General Instructions for Certain Information Returns

There are some exceptions to the penalty, though. More information regarding exceptions can be found in the IRS General Instructions.

Fines can accumulate pretty quickly! Check out our graphic below to see what this can look like for a small business with only 10 forms to send out.

IRS Failure to File Graph
IRS Failure to File Fine Amounts Example

How do I make a correction?

You must take the time to review the information you are reporting on your Forms 1099-DIV for accuracy before distributing and filing, including the payment amounts and taxpayer information. This will minimize the risk of common errors, which can result in your business incurring penalties and fines.

Even with careful reviewing, mistakes can happen! If your filing has errors, you can easily make corrections to your Forms 1099-DIV.

  • If you submitted your original filing electronically, then you should edit your filing accordingly with the original vendor.
  • If you submitted your original filing via mail, then you should complete a new form and include the updated information.
    • Once this has been completed, simply check the “Corrected” box at the top of the form. Always include a new transmittal Form 1096 when mailing corrections to the IRS.

Before you can consider your correction complete, an updated copy of the form must be provided to the recipient as well. This ensures that all parties have updated information.

Conclusion

Once you have submitted these forms to the IRS, either electronically or via mail, and have received your “Accepted” status, then you have met all of the IRS requirements for these forms.

If you’re looking for a broken-down Understanding Form 1099-DIV guide in a downloadable format, make sure to download our PDF guide.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

Leave a comment