1099 DIV Form Penalties and Due Date: Did you receive dividends and distributions of $10 more in 2020 tax year? Every banks, investment companies or financial institutions must issue the investment paid during the tax year through 1099 DIV Tax Form. Form 1099 DIV is used to report dividends and distributions paid during the calendar year.
IRS also requires investment companies to issue 1099 DIV Forms to investors on stocks or mutual funds within the due date. We’ll let you know about due dates and penalties related to 1099 DIV Tax Form.
What are the 1099 DIV late filing penalties?
According to the IRS 2020 guidelines, the due dates and penalties regarding filing of Form 1099 DIV have been changed. Please take a note of these changes as the penalties has increased compared to the prior year.
New filing due date
Beginning with the 2020 tax year, the taxpayers must issue copy B of Form 1099 DIV on or before February 1st, 2021.
The penalties for not providing a correct payee statement on-time is increased. The revised penalty is at least $550 per payee statement with no maximum penalty.
Revised 1099 DIV Form penalties
- If you file 1099 DIV Form within 30 days after the due date i.e. March 31st, 2021, you need to pay $50 per Form.
- Pay $110 per 1099 DIV Form, if you file more than 30 days after the due date.
- If you don’t file required 1099 DIV Form, then you need to pay $280 per Form.
When to file a 1099 DIV Form?
Form 1099 DIV is commonly known as the Dividends and Distributions Form. It is given to investors from banks or other financial institutions if there were taxable dividends paid out to the investors. The following are the circumstances to file 1099 DIV Form:
- Issue Form 1099 DIV for the investors when the dividends are paid to the investors on stocks or mutual fund investments.
- Report the dividends paid as capital gain distributions from a mutual fund through 1099 DIV Form.
- If you paid $10 or more as exempt interest dividends on stock, then report the dividends through 1099 DIV Form.
- Withholding of dividends on foreign tax and federal tax under backup withholding rules required to be reported through 1099 DIV Form.
1099 DIV extensions
All the 1099 DIV Forms must be sent to the IRS within the due date. If in case, the banks or any other financial institutions didn’t have sufficient time to file 1099 DIV Form with the investors and with the IRS. Then the banks can request an automatic 30-days extension from the IRS for the 1099 DIV Form. IRS will grant an automatic 30 days extension to the business individuals when requested through a letter.
An extension can be requested by filling out Form 8809 through the FIRE system or by manually completing the Form 8809 and mailing it. Banks or any other financial institutions must request an extension before 30 days or by the due date of Form 1099 DIV.
Form 1099 DIV valid exception
Banks or financial institutions must provide a valid exception when requesting for additional 30-days extension of Form 1099 DIV. An additional 30-days extension for filing 1099 DIV Form online with the IRS may be available by providing a valid exception.
An additional 30-days extension for 1099 DIV Form is available if:
- The banks or financial institutions are unable to resume operations due to catastrophic event.
- The person who is responsible to file 1099 DIV Form is seriously ill or suddenly died.
- Natural disaster affected the operations of the banks.
- The banks or financial institutions didn’t receive investor information on-time.
Note: According to Form 8809 instructions, if the payer receives an automatic extension, request a second Form 8809 for additional extension within 30 days.
1099 DIV Form 2020 due date
As the year 2021 approaches, the deadlines to file 1099 DIV Form appear closer. Being a responsible individual, it’s important to prepare and issue 1099 DIV Form to the recipient and to the IRS without any delay.
Banks, investment companies or financial institutions must prepare and report the appropriate payments through 1099 DIV Tax Form before the deadline. The following are the deadlines to file 1099 DIV Form for reporting the 2020 tax year payments:
- Furnish 1099 DIV Form to the investor by February 1st, 2021.
- Submit the 1099 DIV Form copy A to the IRS by March 1st, 2021 for paper forms.
- Issue 1099 DIV Form copy A to the IRS electronically by March 31st, 2021.
Note: Issue Form 1099 DIV to the IRS and to the recipients before the above due dates. Otherwise heavy penalties for late submission or wrong information will be imposed by the IRS.
How to avoid 1099 DIV Form penalties?
The best way to avoid 1099 DIV Form penalties is by using an efficient e-filing process that helps to submit the Forms accurately and on time.
If you’re filing multiple 1099 DIV Forms, using a bulk upload service can help to relieve the process. The more forms misfiled the higher penalties are imposed by the IRS. Be sure the information provided through 1099 DIV Form is correct. Make sure the TIN entered in the respective 1099 DIV Form is a valid one.
Are you worried about the IRS rules for the current tax year? You don’t have to worry! Our e-filing programs are updated with the current year’s tax information to help you to file with the requirements. We guide you in filing 1099 Forms accurate speed. You can file 1099 DIV Form at Printable 1099 NEC online.