Everything you need to know about filing 1099s, W-2s, and other tax forms for your business
Form 1099-C is the IRS information return you file when you cancel a debt of $600 or more. If you are a lender, financial institution, or creditor that forgave, discharged, or wrote off a debt during the tax year, you must file Form 1099-C with the IRS and send a copy to the borrower.
Our platform makes 1099-C eFiling fast, accurate, and IRS-compliant — even when you are reporting hundreds of canceled debts in a single filing season.
Form 1099-C — formally titled Cancellation of Debt — reports debt that a creditor has forgiven or discharged. When you cancel $600 or more of a borrower’s debt, the IRS treats that forgiven amount as potential income to the borrower, and you must report it.
Borrowers use the information on Form 1099-C to report canceled debt income on their federal tax return. The amount you report in Box 2, along with the date of the cancellation event, tells the borrower exactly what to include. Accurate reporting keeps both you and the borrower clear of corrections and IRS notices down the line.
You must file Form 1099-C if you are an applicable entity that canceled $600 or more of a debt during the tax year. The $600 threshold applies per borrower, per debt.
Note: File a separate Form 1099-C for each borrower whose debt you canceled. If the same event triggers both a 1099-A and a 1099-C for the same property, you can file a single 1099-C and skip the 1099-A — check the current IRS instructions before you combine them. A cancellation is reportable when an identifiable event occurs, such as a discharge in bankruptcy, an agreement to forgive, or the expiration of your ability to collect.
Validate every borrower TIN before you file. A mismatched name and TIN is the most common reason a return gets rejected, and it is the easiest error to catch early. Run each borrower through TIN Matching first, then file with confidence.
Deadlines for Form 1099-C are fixed. File on time to avoid penalties.
| Milestone | Deadline |
|---|---|
| Recipient copies furnished | January 31 of the year following the cancellation |
| IRS paper filing | February 28 |
| IRS eFile submission | March 31 |
Filing threshold: If you file 10 or more information returns of any type in a calendar year, the IRS requires you to file electronically. eFiling meets that requirement and confirms receipt the moment you submit.
Penalties: Late or incorrect filings may result in penalties of $60–$310 per form, based on how late the correction is made. Intentional disregard penalties start at $660 per form with no cap. Filing accurate returns on time is the simplest way to avoid every one of these charges.
What is Form 1099-C used for?
Form 1099-C reports debt of $600 or more that a creditor has canceled, forgiven, or discharged. Borrowers use it to report canceled debt income on their federal tax return.
Who is required to file Form 1099-C?
Any applicable entity that cancels $600 or more of a debt must file. This includes banks, credit unions, credit card companies, consumer lenders, federal government agencies, and any organization whose significant trade or business is lending money.
When is Form 1099-C due?
Borrower copies are due by January 31. Paper filings with the IRS are due February 28, and eFile submissions are due March 31.
What triggers a 1099-C filing?
An identifiable event triggers the filing — for example, a discharge in bankruptcy, an agreement to cancel the debt, a foreclosure, or the expiration of your ability to collect. Report the cancellation in the year the event occurs.
What’s the difference between Form 1099-A and Form 1099-C?
Form 1099-A reports the acquisition or abandonment of property that secured a loan. Form 1099-C reports canceled debt. If a single event triggers both, you can file only the 1099-C — confirm with the current IRS instructions before you combine them.
How do I avoid a rejected 1099-C filing?
Validate each borrower’s name and TIN before you submit. Mismatched taxpayer data is the leading cause of rejected returns. Running TIN Matching first catches these errors while you can still fix them.
Can I file multiple 1099-C forms at once?
Yes. Our platform supports bulk uploads so you can file high volumes of 1099-C forms in a single submission.
What IRS penalties apply for missing or incorrect 1099-C forms?
Penalties range from $60 to $310 per form depending on how late the correction is filed. Intentional disregard penalties start at $660 per form with no cap.
Report canceled debt accurately and on time. Start your free 7-day trial and file 1099-C forms directly with the IRS today.
