Reporting Qualified Payments in Box 7 of the 2019 1099-PATR

Small business Tax

The IRS has issued new reporting requirements regarding the 2019 Form 1099-PATR.  One particular concern for specified agriculture and horticultural Cooperatives is Box 7 – Qualified Payments. What are qualified payments under this proposed regulation? Proposed regulations are just that, proposed. They may fluctuate and are often vague to accommodate changes, offering little guidance and few details. Based on our findings, qualified payments on Box 7 of the 1099-PATR are those that are included in the eligible Patron’s income under Code section 1385(a):

  • (1) The amount of any patronage dividend which is paid in money, a qualified written notice of allocation, or other property (except a nonqualified written notice of allocations), and which is received by the patron during the taxable year from a cooperative.
  • (3) The amount of any per-unit retain allocation which is paid in qualified per-unit retain certificates (i.e., grain payment, commodity payments) and which is received by the patron during the taxable year from a cooperative.

Final regulations are expected to be released soon.  As one of our valued clients, you can trust that we will be keeping a close eye on the latest developments and will continue to keep you apprised throughout the coming 2020 tax year.  

Topics