Form 1099-MISC 2023 Checklist
Purpose
Form 1099-MISC reports miscellaneous income, including rents, royalties, fishing boat proceeds, and nonqualified deferred compensation (NQDC) to recipients and the IRS for tax year 2023. Recipients must accurately report these amounts on their federal income tax returns according to the specific type of income received.
Year-Specific Updates for 2023
Box 12: Section 409A Deferrals
Box 12 reports current-year deferrals as a nonemployee under qualifying nonqualified deferred compensation plans that meet Section 409A requirements, plus any earnings on current and prior-year deferrals. Payers must separately identify each component for accurate recipient reporting.
Box 15: Nonqualified Deferred Compensation
Box 15 reports income as a nonemployee under an NQDC plan that does not meet the requirements of Section 409A. Any amount included in Box 12 that is currently taxable is also included in Box 15. Recipients must report this income on Form 1040, 1040-SR, or 1040-NR and are subject to a 20% additional tax under IRC Section 409A(a)(1)(B)(i), plus a premium interest tax calculated at the IRS underpayment rate plus 1 percentage point under IRC Section 409A(a)(1)(B)(ii).
Box 13: FATCA Filing Requirement
If the FATCA filing requirement checkbox (Box 13) is marked for 2023, the payer is satisfying account reporting requirements under Chapter 4 of the Internal Revenue Code. Recipients may have separate Form 8938 filing obligations based on the specified foreign financial assets they hold.
Copy A Scannable Requirement
The official IRS printed version of Copy A is scannable and must be ordered from the IRS or obtained through approved vendors. Downloaded versions from IRS.gov are not scannable. Filing non-scannable Copy A with the IRS will result in penalties being imposed under the General Instructions for Certain Information Returns.
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.
Required Steps
Step 1: Verify Payer Information
Ensure the payer’s complete TIN and name match IRS records exactly. Obtain an official copy from IRS sources rather than downloading from the IRS website, as online versions are not scannable and filing them will result in penalties under current IRS scanning requirements for information returns.
Step 2: Confirm Recipient TIN
Verify the recipient’s TIN (SSN, ITIN, ATIN, or EIN) is complete and accurate in your records. The form will display only the last four digits on the copy provided to the recipient for privacy protection, but the complete TIN must be reported to the IRS.
Step 3: Report Box 1 (Rents)
Report rents from real estate on Schedule E (Form 1040). However, use Schedule C (Form 1040) if you provided significant services to the tenant, sold real estate as a business, or rented personal property as a business. Consult Publication 527 for detailed classification rules.
Step 4: Report Box 2 (Royalties)
Report royalties from oil, gas, mineral properties, copyrights, and patents on Schedule E (Form 1040). Exclude working interest, which should be reported as explained in the Schedule E instructions. For timber, coal, and iron ore royalties, see Publication 544.
Step 5: Report Box 3 (Other Income)
Report this amount on the “Other income” line of Schedule 1 (Form 1040) with identification of the payment type. If it constitutes trade or business income, report on Schedule C or F (Form 1040) instead. Box 3 may include deceased employee benefits, prizes, awards, taxable damages, Indian gaming profits, or other taxable income per Publication 525.
Step 6: Report Box 4 (Federal Income Tax Withheld)
Report this amount as backup withholding or Indian gaming profit withholding on your income tax return as tax withheld. Backup withholding generally occurs when you did not furnish Form W-9 to the payer. See Publication 505 for more information.
Step 7: Report Box 5 (Fishing Boat Proceeds)
Self-employed crew members on fishing boats must report this amount on Schedule C (Form 1040). The operator considers you self-employed and reports the amount paid to you as a crew member. Consult Publication 334 for crew member classification guidelines.
Step 8: Report Box 6 (Medical and Health Care Payments)
Individuals engaged in the trade or business of providing medical or health care services must report these payments on Schedule C (Form 1040).
Step 9: Verify Box 7 (Direct Sales Checkbox)
If Box 7 is checked, the payer made direct sales of consumer products totaling $5,000 or more to you for resale. Report income from your resale of these products on Schedule C (Form 1040).
Step 10: Report Box 8 (Substitute Payments)
Report substitute payments instead of dividends or tax-exempt interest on the “Other income” line of Schedule 1 (Form 1040). These payments arise from securities loans arranged by your broker.
Step 11: Report Box 9 (Crop Insurance Proceeds)
Report crop insurance proceeds on Schedule F (Form 1040) as farm income. These payments relate exclusively to agricultural operations.
Step 12: Report Box 10 (Gross Proceeds Paid to Attorney)
Report only the taxable portion of gross proceeds paid to an attorney as income on your return. Do not report the full amount if portions are nontaxable, returned as settlement refunds, or represent reimbursement of expenses.
Step 13: Review Box 12 (Section 409A Deferrals)
Box 12 shows current-year deferrals as a nonemployee under qualifying nonqualified deferred compensation plans subject to Section 409A requirements, plus any earnings on current and prior-year deferrals. This box is optional for payers to complete.
Step 14: Report Box 15 (Nonqualified Deferred Compensation)
Report all amounts from Box 15 as income on Form 1040, 1040-SR, or 1040-NR. This box shows income under an NQDC plan that does not meet Section 409A requirements. You must also calculate and report a 20% additional tax plus premium interest tax (calculated at the IRS underpayment rate plus 1 percentage point) on this income. Any amount included in Box 12 that is currently taxable is also included in Box 15.
Step 15: Report State Tax Withholding (Boxes 16-18)
Review Boxes 16 through 18 for state or local income tax withheld from your payments. Report these amounts on your state tax return as applicable. Box 16 shows state tax withheld, Box 17 shows the state and payer’s state number, and Box 18 shows state income allocated to that state.
Filing Requirements and Deadlines
Recipients should receive Form 1099-MISC by January 31, 2024, for the 2023 tax year. If you have 10 or more information returns to file, you must file electronically. The IRS strongly encourages electronic filing even if you have fewer than 10 returns.
Compliance Considerations
Ensure all reported amounts are accurate and complete. Contact the payer immediately if you identify errors or omissions on your Form 1099-MISC. Should the payer fail to rectify the form, kindly include an explanation in your tax return to guarantee the accuracy of your information. Maintain copies of all 1099-MISC forms received with your tax records for at least three years.
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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.
