Taxable Distributions Received From Cooperatives

2020

Department of the Treasury
Internal Revenue Service

Instructions for Form
1099-PATR
Taxable Distributions Received From Cooperatives
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form
1099-PATR and its instructions, such as legislation enacted after
they were published, go to IRS.gov/Form1099PATR.

What’s New

Numbered reporting box changes. New boxes were added and
existing boxes were renumbered, retitled, and/or repurposed to
allow for reporting information to patrons needed for section 199A.
See the revised instructions for boxes 2, 5, 6, 7, 8, and 9, later.
Box 13 title and content change. Box 13 has been renamed and
the instructions have been updated accordingly. See Box 13.
Specified Cooperatives, later.
Extension of certain credits. Certain credits reported in box 12
have been extended. See Box 12. Other Credits and Deductions,
later.

Reminders

In addition to these specific instructions, you should also use the
2020 General Instructions for Certain Information Returns. Those
general instructions include information about the following topics.
• Who must file.
• When and where to file.
• Electronic reporting.
• Corrected and void returns.
• Statements to recipients.
• Taxpayer identification numbers (TINs).
• Backup withholding.
• Penalties.
• Other general topics.
You can get the general instructions at IRS.gov/
1099GeneralInstructions.
Online fillable copies. To ease statement furnishing requirements,
Copies B and C have been made fillable online in a PDF format
available at IRS.gov/Form1099PATR. You can complete these
copies online for furnishing statements to recipients and for retaining
in your own files.

Specific Instructions

File Form 1099-PATR, Taxable Distributions Received From
Cooperatives, for each person to whom the cooperative has paid at
least $10 in patronage dividends and other distributions described in
section 6044(b), or from whom you withheld any federal income tax
under the backup withholding rules regardless of the amount of the
payment. A cooperative determined to be primarily engaged in the
retail sale of goods or services that are generally for personal, living,
or family use of the members may ask for and receive exemption
from filing Form 1099-PATR. See Form 3491, Consumer
Cooperative Exemption Application, for information about how to
apply for this exemption. Report dividends paid on a cooperative's
capital stock on Form 1099-DIV, Dividends and Distributions.

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CAUTION

Report on Form 1099-PATR only items of income,
expenses, and credits that you properly pass through to
patrons for reporting on the patron's tax return.

Mar 04, 2020

Exceptions. Generally, you are not required to file Form
1099-PATR for payments made to a corporation, a tax-exempt
organization including tax-exempt trusts (HSAs, Archer MSAs, and
Coverdell ESAs), the United States, a state, a possession, or the
District of Columbia. See Regulations section 1.6044-3(c).

Statements to Recipients

If you are required to file Form 1099-PATR, you must furnish a
statement to the recipient. For more information about the
requirement to furnish statements to recipients, see part M in the
2020 General Instructions for Certain Information Returns.
Truncating recipient's TIN on payee statements. Pursuant to
Regulations section 301.6109-4, all filers of this form may truncate a
payee’s TIN (social security number (SSN), individual taxpayer
identification number (ITIN), adoption taxpayer identification number
(ATIN), or employer identification number (EIN)) on payee
statements. Truncation is not allowed on any documents the filer
files with the IRS. A filer’s TIN may not be truncated on any form.
See part J in the 2020 General Instructions for Certain Information
Returns.

2nd TIN Not.

You may enter an “X” in this box if you were notified by the IRS twice
within 3 calendar years that the payee provided an incorrect TIN. If
you mark this box, the IRS will not send you any further notices
about this account.
However, if you received both IRS notices in the same year, or if
you received them in different years but they both related to
information returns filed for the same year, do not check the box at
this time. For purposes of the two-notices-in-3-years rule, you are
considered to have received one notice and you are not required to
send a second “B” notice to the taxpayer on receipt of the second
notice. See part N in the 2020 General Instructions for Certain
Information Returns for more information.
.
For information on the TIN Matching System offered by the

TIP IRS, see Items You Should Note in the 2020 General
Instructions for Certain Information Returns.

Account Number

The account number is required if you have multiple accounts for a
recipient for whom you are filing more than one Form 1099-PATR.
Additionally, the IRS encourages you to designate an account
number for all Forms 1099-PATR that you file. See part L in the 2020
General Instructions for Certain Information Returns.

Box 1. Patronage Dividends

Enter the patron’s share of total patronage dividends paid in cash
(including qualified or “consent” checks), qualified written notices of
allocation (face amount), and other property (except nonqualified
written notices of allocation) allowable as a deduction under section
1382(b)(1).

Box 2. Nonpatronage Distributions

For farmers’ cooperatives exempt from tax under section 521 only,
enter the patron’s share of the total amount paid in cash (including
qualified or “consent” checks), qualified written notices of allocation

Cat. No. 27984F

(face amount), and other property (except nonqualified written
notices of allocation) on a patronage basis with respect to the
cooperative’s earnings that are derived from business done for the
United States or any agency thereof or from nonpatronage sources
allowable as a deduction under section 1382(c)(2)(A).

provide this information whether or not you pass any of the domestic
production activities deduction (DPAD) through to the patrons. See
section 199A(b)(7).

Box 8. Section 199A(a) Qualified Items

Redemptions of nonqualified written notices of allocation that
were paid on a patronage basis with respect to the cooperative's
earnings from nonpatronage sources allowable as a deduction
under section 1382(c)(2)(B) are required to be included in box 2.
Prior to tax year 2020, these amounts were reported in box 5.

Enter amounts reported to the patrons that are qualified items of
income, gain, deduction, or loss from qualified trades or businesses
that are not a specified service trade or business (SSTB) for
purposes of section 199A. Examples of income that are not qualified
items include tax-exempt income, capital gains, and income that
isn't effectively connected with the conduct of a trade or business
within the United States. See the Instructions for Form 8995-A for
more information on qualified items. Report items relating to SSTBs
separately in box 9.

Box 3. Per-Unit Retain Allocations

Enter the patron’s share of the total per-unit retain allocations paid in
cash, qualified per-unit retain certificates (face amount), and other
property (except nonqualified per-unit retain certificates) allowable
as a deduction under section 1382(b)(3).

Box 9. Section 199A(a) SSTB Items

Enter amounts reported to the patrons that are qualified items from
otherwise qualified trades or businesses that are an SSTB for
purposes of section 199A. Examples of SSTBs include the provision
of services in the fields of health, law, accounting, etc. See the
Instructions for Form 8995-A for more information on SSTBs and
income that does not qualify as qualified items.

Box 4. Federal Income Tax Withheld

Enter backup withholding on patronage payments. Persons who
have not furnished their TIN to you in the manner required are
subject to withholding on payments required to be reported in boxes
1, 2, 3, and 5 to the extent such payments are in cash or qualified
check. See Regulations section 31.3406(b)(2)-5 for more
information on backup withholding by cooperatives.

Box 10. Investment Credit

Enter the patron’s share of total investment credit.

For more information on backup withholding, including the
applicable rate, see part N in the 2020 General Instructions for
Certain Information Returns.

Box 11. Work Opportunity Credit

Enter the patron’s share of total work opportunity credit.

Box 5. Redeemed Nonqualified
Notices

Box 12. Other Credits and Deductions

For the patron, state separately in box 12 the type and amount of
each of the following credits and deductions.
• The empowerment zone credit (Form 8844).
• The low sulfur diesel fuel production credit (Form 8896).
• The credit for small employer health insurance premiums (Form
8941).
• The credit for employer differential wage payments (Form 8932).
• The deduction for capital costs incurred by small refiner
cooperatives when complying with EPA sulfur regulations.
• The biodiesel and renewable diesel fuels credit (Form 8864).
• The biofuel fuels credit (including second generation biofuel)
(Form 6478).
• The renewable electricity, refined coal, and Indian coal
production credit (Form 8835).
• The Indian employment credit (Form 8845).

Enter the amount of redeemed nonqualified written notices of
allocation that were paid as a patronage dividend and the amount of
redeemed nonqualified per-unit retain certificates that were paid as
a per-unit retain allocation. See sections 1382(b)(2) and (4).

Box 6. Section 199A(g) Deduction

For specified agricultural and horticultural cooperatives only, enter
the patron's share of the amount of section 199A(g) deduction
claimed by the cooperative under section 199A(g) and passed
through to the patron. This amount must have been designated in a
written notice sent to the patron from the cooperative within the
payment period under section 1382(d). The deduction allocated to
each patron cannot exceed 9% of the qualified payments reported in
box 7 and cannot be passed through to patrons that are C
corporations. Do not reduce the amounts reported in box 1 or box 3
by the amount reported in box 6.

Box 13. Specified Cooperatives

Check this box if you are reporting information as a specified
agricultural or horticultural cooperative, defined in section 199A(g)
(4)(A) as a cooperative to which part 1 of subchapter T of chapter 1
of subtitle A of the Code applies which is engaged (1) in the
manufacturing, production, growth, or extraction in whole or
significant part of any agricultural or horticultural product, or (2) in
the marketing of agricultural or horticultural products.

Note. The cooperative must reduce its section 1382 deduction by
the amount of the section 199A(g) deduction passed through to its
patrons.

Box 7. Qualified Payments

For specified agricultural and horticultural cooperatives only, enter
the qualified payments paid to the patron. You are required to

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Instructions for Form 1099-PATR (2020)