Report canceled or forgiven debts of $600 or more — the amount forgiven is generally taxable income.
Form 1099-C is filed by financial institutions, credit unions, and other lenders when they cancel or forgive a debt of $600 or more. The canceled amount is generally considered taxable income to the debtor, though exceptions exist for bankruptcy, insolvency, qualified principal residence indebtedness, and certain farm debts.
Filing threshold: $600
Paper Filing
February 28
Electronic Filing
March 31
Recipient Copy
January 31
$60–$310 per form depending on how late
2024 penalty tiers: $60/form (≤30 days late) → $130/form (31 days–Aug 1) → $310/form (after Aug 1) → $630/form (intentional disregard). Small business caps may apply.
| Box | Description |
|---|---|
| Box 1 | Date of identifiable event |
| Box 2 | Amount of debt discharged |
| Box 3 | Interest if included in Box 2 |
| Box 5 | Check if the debtor was personally liable |
| Box 6 | Identifiable event code |
| Box 7 | Fair market value of property |
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File electronically via FIRE (Pub 1220) or IRIS — no paper, no postage, instant confirmation.
Verify taxpayer IDs before filing to avoid CP2100 notices and B-Notice requirements.
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File corrections or void forms electronically — no manual IRS correspondence needed.
Not always. Key exceptions include: bankruptcy (Title 11), insolvency, qualified principal residence debt (through 2025), qualified farm indebtedness, and certain student loan forgiveness. You must file Form 982 to claim these exclusions.
Contact the creditor to request a corrected form. If unsuccessful, report the amount on your return and attach a statement explaining the dispute.
Not necessarily. A 1099-C is a tax reporting requirement, not a legal release of the debt. Some creditors still retain the right to collect.
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