How to File a Corrected 1099 Division

How to File a Corrected 1099 Division

A 1099-Div form is what banks, brokerages, and other financial institutions will use to tell you about the dividend income you receive each year. You must use these forms to complete your annual tax returns. Sometimes a 1099-Div may need to be corrected. When a 1099-Div is incorrect, you must react quickly to correct the error. If the institution identifies the error, then you may receive a corrected 1099-Div after you complete your tax return, and you may need to file an amendment.

Carefully read your 1099-Div. At the end of January each year, you should receive a Form 1099-Div from any institution that issued dividend payments to you during the year. The 1099-Div is used to report several different types of dividend income. It is your responsibility as the taxpayer to read the form carefully and identify any errors. The 1099-Div reports the following types of income:

  • Ordinary dividends
  • Capital gains distributions
  • Distributions other than dividends
  • Cash and non-cash liquidation distributions
  • Exempt interest dividends

Notify the sender of any errors. If you identify any errors on the 1099-Div you receive, you should immediately notify the institution that issued it to you. If you let the sender know quickly enough, they may not have already submitted the incorrect form to the IRS and you can save everyone some extra work. 

There is a window of time between the date the institution sends you the 1099-Div and sends a copy to the IRS. If you identify the error during this window, it will be easier to correct the error.

Request a corrected form of 1099 Div. When you identify an error, regardless of the amount, you must tell the issuing institution to send you a corrected one. If the broker or customer service representative you’re talking to doesn’t want to handle this, keep making calls and ask for a manager or supervisor. 

When you reach out to someone, say, “I received a 1099-Div form that is incorrect. The amount in box 1 says I earned $5,000 in dividends, but my records say it should be $3,000.” Keep notes of your conversation.

The 1099-Div is submitted to the IRS and is used in calculating your taxes, so it must be accurate. An incorrect form or a discrepancy between the form submitted to the IRS and the information you report on your tax return can lead to an audit.

Carefully review the correct form. You may receive a corrected Form 1099-Div by your request, or a corrected form may arrive unexpectedly. Either way, you should study it carefully. Compare the information on Form 1099-Div with your records. 

Determine the evolution of your taxes. In most cases, the information on a Form 1099-Div relates to income you received during the year. Some of this income will be taxable, some will not. Decide if the information will cause your taxes to change.

The instructions that accompany the 1099-Div will tell you where to report the income on your Form 1040 or 1040A. For certain types of income, such as capital gains, you may need to do additional work and complete additional forms to determine if the income is taxable.

If you receive the corrected 1099-Div before you file your tax return, you’re in luck. Simply use the corrected form instead of the original to prepare your tax return.

Remember status reports. Most US states also have their tax filing requirements. A corrected 1099-Div can affect your state tax return as well as your federal return. When you receive the corrected 1099-Div, check your state tax return to determine if any changes are needed.

Decide if you want to file an amended tax return. A corrected 1099-Div does not automatically require you to file an amended tax return. You must file an amended tax return if the correction results in a material change in your tax liability or requires you to make a refund. Some tax professionals recommend that you file an amended return to represent any changes on a Form 1099-Div. Nevertheless, here are some reasons why you might receive a corrected 1099-Div that would not require you to modify your tax return:

  • If the correction was only to requalify the type of dividend but not the amount, your tax liability may not change.
  • If the change is of a minimal amount ($10 or less), no amended declaration will be required.

Use Form 1040X. If you determine that you need to file an amended return because of a corrected 1099-Div, you will need to file Form 1040X. You can access a PDF copy of this form You can complete the form directly on the computer, then print a complete, typed form. Keep a copy of the completed form for your records.

Refer to your original file. When filing Form 1040X, you will need to have your original filing, whether Form 1040 or 1040A, available. You will make references to the information you originally filed and highlight any changes. 

In most cases, the changes caused by a corrected 1099-Div will affect your income. You will report the modified income amounts on lines 1 and 5 of Form 1040X.

Explain the reason for the change. In Part III of Form 1040X, you are asked to provide a brief explanation of the change. This is where you can explain that you have received a corrected Form 1099-Div. If possible, explain how and when the need for correction arose and include the dates you received the 1099-Div. 

For example, you might say, “On January 20, 2016, I received a 1099-Div that declared $100,000 in dividend income. My dividend for the year was $10,000. I notified the issuer of this error and received a corrected 1099-Div on March 16, 2016. By then I had already filed my Form 1040 tax return.”

Attach the corrected 1099-Div. The corrected 1099-Div will be delivered with several copies. One of them will be marked to be sent to the IRS. Attach this copy to your completed 1040X. 

You should receive an additional copy of the corrected 1099-Div for your state filing. If you decide you need to file an amended state return, attach a copy as well.

Submit by email. You cannot file Form 1040X electronically. Once the form is completed, print a hard copy and sign it where indicated. Keep a copy for your records. Mail the completed Form 1040X, along with the copy of the corrected 1099-Div, to one of the following addresses: 

If you live in Florida, Louisiana, Mississippi, or Texas, send it to:

  • Treasury Department, Internal Revenue Service, Austin, TX 73301-0052.
  • If you live in Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin or Wyoming, send it to:
  • Treasury Department, Internal Revenue Service, Fresno, CA 93888-0422.
  • If you live in Alabama, Connecticut, Delaware, District of Columbia, Georgia, Kentucky, Maine, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, or West Virginia, send it to:
    • Treasury Department, Internal Revenue Service, Kansas City, MO 64999-0052.
  • If you live elsewhere, send it to:
    • Treasury Department, Internal Revenue Service, Austin, TX 73301-0215.

Meet the deadline. If you decide to file an amended tax return to submit the corrected Form 1099-Div, you must meet one of the following deadlines that apply to you: 

  • If you owe additional tax, you must file the 1040X and make your additional payment by the original tax deadline (approximately April 15).
  • If you are claiming a refund, you must file the 1040X within three years of the date of your original 1040 or 1040A filing or two years after you paid the tax, whichever is later.

Monitor your changed repository. Starting three weeks after you file your Form 1040X with your corrected 1040-Div, you can monitor your return online using the “Where is my amended return” tool. You can access it through the IRS website at 

  • You can also call the IRS to ask about the status of your amended return at 866-464-2050.
By aamritri

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