Question

Debt Settlement and taxes

Forum|Forum|2 years ago
February 8, 2024
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In Nov-Dec 2023 I settled debt with some of my creditors. I haven’t received the 1099-c for them. I was told that I won't receive it until the settlement is complete. So I get the forms in 2025 for the debts that are paid off this year. Is this correct?

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J

JamesG1

If you are dealing with multiple creditors, some or all of the IRS forms 1099-C are likely to arrive next year. Different kinds of debt to different kinds of creditors may require different identifiable events to trigger the IRS form 1099-C. See the Instructions below for further explanation of an identifiable event.

The IRS Instructions for form 1099-A and 1099-C, page 4, here, states:

When To File

File Form 1099-C in the year following the calendar year in which the identifiable event occurs. If you cancel a debt before an identifiable event occurs, you may choose to file Form 1099-C for the year of cancellation. No further reporting is required even if a later identifiable event occurs with respect to an amount previously reported. Also, you are not required to file an additional or corrected Form 1099-C if you receive payment on a prior year debt.

You may not see the form until March or later in the year that the form is filed. IRS form 1099-C and 1099-A are filed with form IRS form 1096. IRS form 1096 here states: