1099 Reporting Shifts to Banks for Credit Card Transactions
April 26, 2011
In order to avoid double reporting, institutions will no longer need to file Forms 1099 on purchases made using credit cards or procurement cards.
In final rules implementing the new Form 1099-K, the Internal Revenue Service clarifies that Form 1099-MISC reporting of payment card purchases of goods and services, beginning for tax year 2011, will now be reported by the bank (VISA, AMEX, etc.) rather than by the institution-cardholder. This is a welcome relief for institutions currently reporting on p-card transactions.
Section 6050W governing payment cards and third party network transactions, requires the financial institutions that make payments in settlement of payment card transactions to begin 1099-K reporting for the tax year starting January 1, 2011.
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