Form 1099-C (Rev. January 2022) — 2022 Tax Year Checklist
Purpose
Form 1099-C reports cancellation of debt of $600 or more. For 2022, the $600 reporting threshold applies to all filers, with special treatment for identifiable events under Section 108.
Debtors must report discharged amounts as gross income unless an exception applies, such as bankruptcy or insolvency, per Publication 4681. Box 6 codes identify the discharge reason, and Box 7 FMV data coordinates with Form 1099-A for foreclosures.
Creditor Filing Steps
Verify Debt Amount Meets 2022 Threshold
The creditor must report a discharge of $600 or more in Box 2. Amounts below $600 are not reportable unless state law requires reporting or the debtor requests written confirmation.
Identify and Code the Event in Box 6 Using 2022 Guidance
The creditor must select code A (Bankruptcy), B (Other judicial debt relief), C (Statute of limitations/deficiency period), D (Foreclosure election), E (Probate discharge), F (Agreement), G (Collection discontinuation), or H (Other actual discharge before identifiable event) per Publication 4681 2022 instructions.
Complete Box 1 with Identifiable Event Date
The creditor must report the earliest identifiable event date, or, at the creditor's discretion, the actual discharge date if it precedes the event. The creditor must coordinate with state insolvency filing dates if applicable under the 2022 guidance.
Segregate Interest in Box 3
If interest is included in the debt amount shown in Box 2, the creditor must separately report it in Box 3. The creditor reports the segregated amount to allow debtor exclusion calculation per Publication 4681.
Link Form 1099-C to Form 1099-A for Foreclosures
If foreclosure or property abandonment occurred in the same calendar year 2022, the creditor must report FMV in Box 7 or provide the debtor a separate Form 1099-A. The creditor must use the gross foreclosure bid price or appraised value for voluntary conveyance.
Complete Debtor and Creditor TIN Fields Accurately
The creditor must enter the full Creditor TIN and Debtor TIN (SSN, ITIN, ATIN, or EIN). For Copy B furnished to the debtor, either the full TIN or the last four digits are acceptable, but the creditor must report the complete TIN to IRS on Copy A.
Attach Box 4 Description and Account Number
The creditor must provide a clear debt description, such as a credit card, mortgage, or business loan. Account number is optional but recommended to distinguish accounts, and property description is required if Box 7 is completed.
File Copy A with Form 1096 Transmittal
The creditor must submit a scannable Copy A in red to the IRS with Form 1096 annual summary. The creditor must not print Copy A from the website and must order official scannable forms to avoid penalties.
Furnish Copy B to Debtor by January 31, 2023
The creditor must provide the debtor with a written statement (Copy B, in black) by the deadline. The creditor must include Publication 4681 reference and note that the debtor may owe tax unless an exception applies.
Correct Errors Using the VOID/CORRECTED Checkbox
For 2022 corrections filed in 2023, the creditor must mark the CORRECTED box on the revised form and file it with the Form 1096 correction transmittal. The creditor must retain documentation of the original and corrected discharge amounts.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Debtor Reporting Steps
Verify Receipt and TIN Accuracy
You must confirm Form 1099-C shows your correct TIN, with the last four digits acceptable on Copy B. If a creditor error exists, you must request a corrected form before the tax filing deadline.
Determine Gross Income Inclusion Requirement for 2022
You must report the discharged amount as "Other income" on Form 1040 or 1040-SR unless an exception applies. You must not assume exclusion without reviewing Publication 4681 exceptions.
Check Bankruptcy Discharge Exclusion
If debt was discharged in bankruptcy, shown as Box 6 code A, the discharged amount is excluded from gross income. You must coordinate with bankruptcy estate filings and Schedule 982 if required.
Apply Insolvency Exclusion Using 2022 Rules
If you were insolvent immediately before discharge, meaning liabilities exceeded assets, the amount of insolvency reduction may be excluded. You must calculate using fair market values on the discharge date.
Identify Nonrecourse Debt Treatment
If Box 5 is unchecked, meaning you were not personally liable, discharge is treated as a gain or loss on property disposition. You must report on Schedule 4797 or Form 8949, depending on property type.
Address Foreclosure and Abandonment Coordination
If Box 7 contains FMV or a separate Form 1099-A is provided, you must calculate gain or loss on property acquisition or abandonment under Section 121 for principal residence or capital asset rules. See Publication 523 for principal residence treatment.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Interest Segregation Impact
Interest reported in Box 3 may or may not be includable as income, depending on the discharge reason and whether you were on a cash or accrual basis. You must consult Publication 4681 to determine deductibility.
Reconcile with Other Discharges
If multiple creditors report discharges in the same year, you must coordinate total exclusions. You must ensure that the insolvency calculation includes all liabilities and assets as of the discharge date.
2022 Form Updates and IRS Guidance
January 2022 Revision
Form 1099-C (Rev. 1-2022) introduced updated language in Box 5 treatment and clarified identifiable event codes per Publication 4681. Creditors must use the current revision, and prior-year versions are not acceptable.
$600 Reporting Threshold Enforcement
The $600 threshold remains applicable for 2022. Creditors must report all discharges at or above this amount regardless of the debtor's prior tax filing status or income level.
Form 1099-A Coordination
When foreclosure occurs in 2022, creditors must either report FMV in Box 7 of 1099-C or issue a separate Form 1099-A. This approach satisfies both reporting requirements for the same transaction.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
