Form 1099: PATR Taxable Distributions Received From Cooperatives

Form 1099-PATR is an official Internal Revenue Service (IRS) document used to report taxable income received from cooperatives. Cooperatives are businesses owned and operated by their members, who share profits and losses proportionally. This form helps ensure transparency and proper taxation of these distributions.

What is a Cooperative?

A cooperative is a business owned and operated by its members, who share profits or benefits based on their participation. Examples include agricultural cooperatives for farmers, consumer cooperatives for grocery stores, and worker cooperatives for employee-owned businesses.

Who Receives Form 1099-PATR?

Cooperatives are required to file Form 1099-PATR for each member who receives:

  1. At least $10 in patronage dividends (a portion of the cooperative's profits distributed to members)
  2. Other distributions described in IRS section 6044(b)
  3. Any amount of federal income tax withheld under backup withholding rules

What Information Does Form 1099-PATR Contain?

A. Payer Information: The cooperative's name, address, and Employer Identification Number (EIN).

B. Recipient Information: Your name, address, and Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).

C. Distribution Details: Key information about the taxable distributions you received, including:

  1. Box 1: Total patronage dividends and other distributions from the cooperative.
  2. Box 2: Patronage dividends attributable to the purchase of personal items (often non-taxable).
  3. Box 3: The amount you can deduct from your taxable income (patronage dividends allocated for business purchases).
  4. Box 5: Any federal income tax withheld by the cooperative.

How to Use Form 1099-PATR?

Tax Reporting: The information on Form 1099-PATR helps you report your cooperative earnings on your tax return.

Schedule Selection: Depending on your business activity with the cooperative:

  1. Schedule F (Farm Income and Expenses): Use this schedule if your involvement with the cooperative relates to your farming business.
  2. Schedule C (Profit or Loss From Business): This schedule might be appropriate if the cooperative is relevant to your general business operations.

Download the Form 1099-PATR and Information attached below.