Forms 1099-A and 1099-C Reporting Checklist for 2020

published for the 2020 tax year under federal income tax rules. You should review the checklist carefully to confirm how debt cancellation, forgiven debt, and related taxable income must be evaluated and reported on your tax return.

Steps for Reporting Forms 1099-A and 1099-C for 2020

1. Step 1: Understand 2020 Debt Cancellation Reporting Requirements

   For the 2020 tax year, an applicable entity must file Form 1099-C when it discharges $600 or more of indebtedness and an identifiable event occurs. The form reports cancellation of debt income to both you and the Internal Revenue Service for federal income tax purposes.

   Identifiable events include bankruptcy under Title 11, foreclosure, abandonment, or a creditor’s decision to forgive debt. You should identify all identifiable events tied to discharged debt that occurred during the 2020 calendar year.

2. Step 2: Determine If Coronavirus-Related Forbearance Affects Reporting

   Coronavirus-related forbearance or payment deferral does not automatically result in cancellation of debt. A temporary modification, including mortgage restructuring or student loan forbearance, generally does not create taxable income unless an identifiable event occurs.

   For Form 1099-C reporting, creditors focus on whether debt forgiveness or an actual discharge occurred. You should review creditor notices and loan documents to determine whether the arrangement involved deferred payments or forgiven debt.

3. Step 3: Confirm the Creditor’s Filing Obligation

   Financial institutions, credit unions, and other financial entities bear responsibility for determining whether Form 1099-C must be issued. The $600 threshold applies to the principal amount of discharged debt for the 2020 tax year.

   If you believe debt cancellation occurred but did not receive a payee statement, you should request written confirmation from the creditor. The creditor determines whether the event qualifies as a reportable cancellation of debt under federal tax law.

4. Step 4: Verify the Correct Issue Date Rule for 2020

   Form 1099-C must report the correct date of the identifiable event in Box 1. In limited cases, the creditor may report an earlier actual discharge date instead of a later identifiable event date.

   You should confirm that the Box 1 date falls within the 2020 calendar year and matches the event that triggered debt cancellation. Accurate dates ensure proper inclusion of income on the correct tax return.

5. Step 5: Identify Exceptions to 1099-C Reporting for 2020

   Certain situations create exceptions to Form 1099-C reporting requirements. These exceptions may apply to bankruptcy cases, non-principal amounts, or specific transactions excluded under the Internal Revenue Code.

   You should review whether discharged debt qualifies for an exclusion before treating it as taxable income. Bankruptcy under Chapter 7 or Chapter 13 may affect whether cancellation of debt is reportable or excluded.

6. Step 6: Report 1099-A Events Separately From 1099-C

   Form 1099-A reports foreclosure or abandonment of real property and focuses on fair market value and outstanding loan balances. Form 1099-C reports the cancellation of debt that may occur after foreclosure when a deficiency remains.

   In some cases, you may receive both forms for the same property transaction. You should evaluate each form separately and understand how foreclosure and discharged debt relate to one another.

7. Step 7: Locate the 1099-C Amount in Box 2

   Box 2 of Form 1099-C reports the principal amount of canceled debt for the tax year. This amount reflects debt that the creditor actually or deemed discharged during 2020.

   You should compare the Box 2 amount to loan statements, payoff records, or settlement documents. The reported amount may be taxable income unless an exclusion applies under

   Section 108.

8. Step 8: Review Boxes 4 and 6 for Reporting Details

   Box 4 describes the debt, such as credit card debt, mortgage debt, or other obligations. Box 6 identifies the specific identifiable event code used by the creditor.

   You should review these boxes together with Box 1 and Box 2 to understand what triggered the

   Form 1099-C. These entries help clarify whether the reported cancellation reflects foreclosure, bankruptcy, or another qualifying event.

9. Step 9: Report Cancellation of Debt Income on Your 2020 Tax Return

   If taxable, cancellation of debt income generally appears as other income on Form 1040 or

   Form 1040-SR. You must include the reported amount in gross income unless you qualify for an exclusion.

   The 2020 instructions do not include a separate worksheet for COD income. You should retain the Form 1099-C with your records to support the amount reported on your tax return.

10. Step 10: Preserve Documentation for Claimed Exclusions

    If you exclude discharged debt from taxable income, you must document the exclusion.

    Common exclusions include insolvency, bankruptcy, or qualified real property business indebtedness.

    You must file Form 982 with your 2020 tax return to report exclusions under Section 108.

    Supporting records should reflect your financial condition at the time the debt was forgiven.

11. Step 11: Reconcile Multiple 1099-C Forms for the Same Debt

    You may receive more than one Form 1099-C if debt forgiveness occurs in stages or involves multiple creditors. Each form reflects a cancellation reported for a specific tax year.

    You should verify that the combined amounts do not duplicate the same discharged debt.

    Contact the creditor if clarification is needed regarding which portion applies to the 2020 tax year.

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12. Step 12: File Your 2020 Return With 1099-C Information Included

    You should file your 2020 federal income tax return with all required forms, schedules, and disclosures. Include any taxable cancellation of debt income or properly claimed exclusions.

    Maintain copies of all Forms 1099-A, Forms 1099-C, and Form 982 for your records. The

    Internal Revenue Service receives matching information from creditors and may issue under-reporter notices if amounts do not align.

    If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.