IRS Reporting Procedures for Tax Year 2009 7.0.21
Summary:
This document describes the required procedures for reporting year 2009 tax information to the Internal Revenue Service, and for printing IRS tax forms for the members. This includes the reporting of mortgage loan interest (form 1098), cancellation of debts (form 1099-C), dividends/interest (form 1099-INT), original issue discounts for certificates with terms greater than one year and interest deferred until maturity (form 1099-OID), Coverdell ESA distributions (form 1099-Q) and contributions (form 5498-ESA), and IRA distributions (form 1099-R) and contributions (form 5498). Also available in the 7.0 release is reporting for HSA distributions (form 1099-SA) and contributions (form 5498-SA), and student loan interest (form 1098-E).
****NEW FOR 2009****
IRS Changes
- Form 1098-E Loans made before September 1, 2004, Check box 2 on Form 1098-E if the amount in box 1 does not include loan origination fees and/or capitalized interest. (In prior years the box was checked when box 1 included loan origination fees and/or capitalized interest)
- Form 1099-C was revised. Boxes 1, 2, and 3 have been repositioned and box 4 has been enlarged and named “Debt Description” A new box 5 is used to indicate whether the borrower was personally liable for repayment of debt. The Creditor’s phone number must be printed on the form.
- Form 5498 was enlarged and reformatted to two to a page instead of three to a page in order to provide additional boxes for reporting information formerly reported in the blank box next to box 10. Boxes 12a through 15b were added as follows: 12a RMD Date, 12b RMD amount, 13a Postponed contribution, 13b Year, 13c Code, 14a Repayments, 14b Code, 15a Other contributions, and 15b Code.
Sharetec Changes
- If a Student loan was made prior to September 1, 2004 and there was no origination fees on the loan box 2 of the 1098-E from will be checked. If there were origination fees on the loan or if the loan was made after September, 1, 2004 box 2 will not be checked.
- A new box “Recourse Debt” was added to 1099 – c Debt Cancellation Info screen. When checked this box will check the Yes box in the new box 5 of the 1099 –C form to indicate the borrower was personally liable for the debt. If the box is unchecked the No box will be checked on the form indicating the borrower was not personally liable for the debt.
- Report master for 5498 stream 1 changed from Portrait to Landscape, columns changed to 173 and page size changed to 44 to allow reporting for new fields on form.
- The RMD (Required Minimum Distribution) date will now print on the 5498 form in box 12a.
- There is not RMD calculator in release 7.0.21 so the RMD amount will not print on 5498 notices. Instead a message will print of the form instructing the member to call the credit union for help determining the RMD amount.
- The following IRA reason codes have been setup to be reported in Box 13a Postponed Contribution, 13b Year, and 13c Code: AF = Allied Force, JE = Joint Endeavor, EF = Enduring Freedom, IF = Iraqi Freedom, and FD = Federal Disaster Area. These codes have been included in ST-DATA. When a contribution is made to an IRA using one of these reason codes the contribution information will print in boxes 13a, 13b, and 13c.
- The following IRA reason codes have been setup to be reported in box 14a Repayments and box 14b Code: QR = Qualified Reservist and DD = Designated Disaster. When a contribution is made to an IRA using one of these reason coded the contribution information will print in boxes 14a and 14b.
- 5498 IRA Contributions report was changed from portrait to landscape and columns added to report the new information for RMD’s and the Postponed and Repayment contributions.
1098 Reporting Procedures:
1098 records are created for each member that has YTD interest paid on all loans designated for 1098 reporting in excess of the minimum amount to be reported entered by the user. Only Loan Types with an “IRS 1098 Stmnt” flag checked [x] are included in calculating reportable 1098 loan interest for each member.
Creating the 1098 files:
- From the Sharetec Menu, select 1098 INT Rpt/Form/Tape (mort1098).
Report Year: Enter the Tax Year to be reported.
Sort By: Use the combo box to select a sort preference.
Mort Group Min Amount: Enter the minimum YTD interest amount to report for “mort” group Loan Types.
Other Groups Min Amount: Enter the minimum YTD interest amount to report for non-“mort”
group Loan Types designated for 1098 reporting.
Corrected: Check this box to create corrected 1098s.
Report: Check this box to create a 1098 report.
Create Forms: Check this box if you want to print Laser 1098 forms.
Create Tape: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Replacement: Check this box if creating a replacement tape/diskette file.
- Printing 1098 laser forms (optional):
- From the Sharetec menu, selectIRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1098mort1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1098 data to IRS.
1For reporting via the internet:
a.Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1098mort1.tape).
1For reporting via Tape:
a.Load the tape into the drive used to create the 1098 Tape.
a.From the Sharetec menu, select IRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be sent to tape/diskette (e.g. 1098mort1.tape) and press F9.
From the selection box, select M) Media.
Unmark [ ] the “Create Disk(s)” box to create a tape.
The “File Name” to be sent to tape has been prefilled. Press F2 to complete this procedure.
1098-E Reporting Procedures:
1098-E records are created for each member that has YTD interest paid on all loans for the specified loan type in excess of the minimum amount to be reported entered by the user.
Creating the 1098-E files:
- From the Sharetec Menu, select 1098-E Rpt/Form/Tape (1098e).
Report Year: Enter the Tax Year to be reported.
Sort By: Use the combo box to select a sort preference.
Min Amount: Enter the minimum YTD interest amount to be reported.
Corrected: Check this box to create corrected 1098Es.
Report: Check this box to create a 1098E report.
Create Forms: Check this box if you want to print Laser 1098E forms.
Create File: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Replacement: Check this box if creating a replacement tape/diskette file.
Loan Types: Select the loan types to be included in the student loan interest reporting.
- Printing 1098-E laser forms (optional).
- From the Sharetec menu, selectIRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1098e1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1098-E data to IRS.
- For reporting via the internet:
a.Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1098e1.tape).
1099-C Reporting Procedures:
1099-C records are created for each charged-off loan (status code “co”) where the debt has been cancelled by the credit union. The member is required to report this as income for the year. Note: The status of the loan must remain “co” in order for the cancelled debt to be reported on a 1099-C.
- Requirements (file maintenance may be required)
The Charge Off/Doubtful FM (chofmt0) program contains the fields required for reporting cancellation of debt. To access these fields, press the (F8) Cancellation key after highlighting the appropriate loan record in the maintenance browser. These fields correspond with the boxes on the 1099-C form and must be maintained before 1099-C program is run:
“Cancelled Date” – (must be dated for this tax reporting year)
“Cancel Amount” – Enter the amount of debt canceled
“Interest” – Enter the amount of interest canceled
“Bankruptcy” – Check box if borrower filed bankruptcy
“Recourse Debt” – Check box if this was a recourse debt
“Market Value” – Enter the market value of property
“Debt Description” – Enter a description of the debt
- Creating the 1099-C file:
- From the Sharetec menu, select 1099-C Rpt/Forms/Tape (1099c).
Report Year: Enter the Tax Year to be reported.
Sort By: Use the combo box to select a sort preference.
Corrected: Check this box to create corrected 1099-Cs.
Report: Check this box to create a 1099-C report.
Create Forms: Check this box if you want to print Laser 1099-C forms.
Create File: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Replacement: Check this box if creating a replacement tape/diskette file.
- Printing 1099-C laser forms (optional):
- From the Sharetec menu, selectIRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1099c1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1099-C file to IRS:
- For reporting via the internet:
- Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1099c1.tape).
1099-INT Reporting Procedures:
1099-INT records are created for each member that has YTD dividends/interest in excess of the “Minimum Reportable Amount” selected by the user. Each member’s YTD dividend/interest amount is calculated using the YTD dividends/interest in each deposit record of the member (excluding IRA account types), and any savings bond interest records established for the member in the Sharetec Savings Bond FM (sbndmt) table.
The credit union has the option to include/exclude “OID” certificates. Sharetec has coded to recognize “OID” certificates with a term > 366 days and a dividend frequency “lump sum ”. If included, “OID” certificates will only be reported only for the year dividends are actually posted to the certificate (i.e. the total amount of dividends paid at maturity).
Creating the 1099-INT files:
- From the Sharetec menu, select 1099-INT/Rpt/Forms/Tape (1099int).
Report Year: Enter the Tax Year to be reported.
Member Number: Enter a specific Member Number or leave blank to report all members.
Sort By: Use the combo box to select a sort preference.
Min Reportable Amt: Enter the minimum YTD interest amount to be reported to the IRS.
Include 1099-OID’s: Check this box to include OID certificates.
Corrected: Check this box to create corrected 1099-INTs.
Forms: Check this box if you want to print Laser 1099-INT forms.
Report: Check this box to create a 1099-INT report.
Create File: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Replacement: Check this box if creating a replacement tape/diskette file.
File Count: Enter the first file number to process (Enter “1” if processing all members).
Print Bad Addresses: Check this box to print forms for members with bad addresses.
- Printing 1099-INT laser forms (optional):
- From the Sharetec menu, selectIRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1099int1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1099-INT files to IRS:
- For reporting via the internet:
- Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1099int1.tape).
1099-OID Reporting Procedures:
1099-OID records are created for members with certificates that have a term > 1 year and a dividend frequency “lump sum” (i.e. interest/dividend payments deferred until maturity). These types of certificates will report the YTD interest/dividends earned during the reporting year (accrued or paid) on form
1099-OID.
- Requirements for Reporting OID Certificates (file maintenance may be required)
Certificate term must be > 366 days. Sharetec calculates the number of days from “Open Date” through “Maturity Date” to determine an “OID” certificate.
Certificate “Div Pay Freq” must be lump sum.
Certificate cannot auto renew. The credit union must manually close and issue a new certificate.
Certificate must have both a valid “Open Date” and “Close Date” after reaching maturity to generate a correct OID record for the year in which the certificate matures.
- Creating the 1099-OID files:
- From the Sharetec menu, select 1099-OID Rpt/Forms/Tape (1099oid).
Report Year: Enter the Tax Year to be reported.
Member Number: Enter a specific Member Number or leave blank to report all members.
Sort By: Use the combo box to select a sort preference.
Min Reportable Amt: Enter the minimum YTD interest amount to be reported to the IRS.
Corrected: Check this box to create corrected 1099-OIDs.
Forms: Check this box if you want to print Laser 1099-OID forms.
Report: Check this box to create a 1099-OID report.
Create File: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Replacement: Check this box if creating a replacement tape/diskette file.
File Count: Enter the first file number to process (Enter “1” if processing all members).
Print Bad Addresses: Check this box to print forms for members with bad addresses.
- Printing 1099-OID laser forms (optional):
- From the Sharetec menu, selectIRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1099oid1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1099-OID files to IRS:
- For reporting via the internet:
- Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1099oid1.tape).
1099 Q Reporting Procedures
1099-Q records are created for each Coverdell ESA account with distributions during the tax year. Distributions are tracked by the IRA Purpose Code selected when funds are withdrawn from a Coverdell ESA Deposit Type.
Creating the 1099-Q files:
1. From the Sharetec menu, select 1099Q Rpt/Forms/Tape (1099r).
Report Year: Enter the Tax Year to be reported.
From Member: Enter the beginning Member Number to report.
Thru Member: Enter the last member Number to report.
Corrected: Check this box to create corrected 1099Qs.
Replacement: Check this box if creating a replacement tape/diskette file.
Report: Check this box to create a 1099Q report.
Create Forms: Check this box if you want to print Laser 1099Q forms.
Create File: Check this box to create a tape/diskette file.
Test Tape: Check this box if creating a test tape/diskette file.
Trustee to Trustee Transfer Codes: Use the selection list to tag the IRA Purpose Codes used for Trustee to Trustee transfers of Coverdell ESA funds. IRS requires that Trustee to Trustee transfers be reported on a separate 1099-Q form.
- Printing 1099-Q laser forms (optional):
- From the Sharetec menu, select IRS Tax Reporting Manager (irsmgr).
From the IRS File Manager browser, highlight the file to be printed (e.g. 1099q1.form) and press F9.
From the selection box, select P) Print.
Enter the name of the printer in the “Printer Destination” prompt.
- Submitting the 1099-Q files to IRS:
- For reporting via the internet:
- Access the IRS reporting website at and follow the instructions to submit the files. The file(s) will be located in the directory specified in the ‘taxdsk’ backoffice control record. (e.g. /tmp/relrpt/1099q1.tape).
- IRS 1099-Q Purpose Codes.
The following list of distribution codes for Coverdell ESA accounts is from the IRS “Instructions for Form 1099-Q” for tax year 2009. This table details the proper codes to report Coverdell ESA distributions on form 1099-Q: