SYRACUSE, N.Y. (WSYR-TV) – You ask, we answer!
Tax season is here and that means filing questions are filed into the Your Stories inbox.
A viewer named Valerie sent the following question:
What is a 1099-C form and will it come in the mail?
We took Valerie’s question to local CPA John Marshall, with the Bonadio Group.
Marshall said if you had debt canceled in 2022, then you should have received a 1099-C form in the mail.
For example, if you settled an old debt and didn’t have to pay the full amount, the amount forgiven is taxable, federally, and at the state level, according to Marshall.
Marshall said many people don’t realize the forgiven debt is taxable.
According to the IRS, A 1099-C is filed by a creditor when the amount canceled is at least $600.
Marshall said, the 1099-C form is sent by the creditor/entity to the IRS and a copy is sent to the individual who had debt forgiven.
An important note – Marshall said, how it’s currently being proposed, this does not apply to the Biden administration’s student loan forgiveness plan. He said the plan, which is currently paused while the courts hear the matter, would not be taxable.