If a debt is discharged in bankruptcy, it is not treated as cancellation of indebtedness income, and it is not taxable. The IRS has provided a simple fix for the seemingly unnecessary 1099-C: Form 982. If you have received a 1099-C, you need to file IRS Form 982 to demonstrate to the IRS that it is not taxable.

Who is required to file IRS Form 1095-C?

IRS Form 1095-C is filed with the IRS by the applicable large employer (ALE) who offers health coverage and enrollment in health coverage for their employees. Employers with 50 or more full time employees are considered ALEs. Employers use 1095-C Form to report the information required under section 6056.

Where can I get a copy of Form 982?

Get a copy of Form 982. You can get blank copies from the IRS or any tax preparer. Formally entitled “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment),” Form 982 is the required document to forgive your tax obligation on Form 1099-C.

What’s the difference between form 1094-c and 1095-C?

Form 1094-C is a transmittal to the IRS that, in combination with Form 1095-C providing individualized information, satisfies these requirements. Form 1095-C is furnished to individuals, but Form 1094-C is not. There are separate deadlines for filing forms with the IRS and furnishing statements to individuals:

Do you have to complete all lines on Form 982?

Certain individuals may need to complete only a few lines on Form 982. For example, if you are completing this form because of a discharge of indebtedness on a personal loan (such as a car loan or credit card debt) or a loan for the purchase of your principal residence, follow the chart, later, to see which lines you need to complete.

What to check on Form 982 if you are insolvent?

You must check box 1a and complete the form as discussed later under A nonbusiness debt. If you are insolvent (and not in a title 11 case), you can elect to follow the insolvency rules by checking box 1b instead of box 1e and completing the form as discussed later under A nonbusiness debt.

Can you exclude discharged indebtedness on Form 982?

However, under certain circumstances described in section 108, you can exclude the amount of discharged indebtedness from your gross income. You must file Form 982 to report the exclusion and the reduction of certain tax attributes either dollar for dollar or 33 1 / 3 cents per dollar (as explained later).

Do you have to file tax Form 982?

You must file Form 982 to report the exclusion and the reduction of certain tax attributes either dollar for dollar or 331/3 cents per dollar (as explained later). Certain individuals may need to complete only a few lines on Form 982.

When to file Form 982 discharge of indebtedness?

Discharge of Indebtedness. The term discharge of indebtedness conveys forgiveness of, or release from, an obligation to repay. When To File. File Form 982 with your federal income tax return for a year a discharge of indebtedness is excluded from your income under section 108(a).

What does qualified acquisition indebtedness mean on IRS Form 982?

Qualified acquisition indebtedness is (a) debt incurred or assumed to acquire, construct, reconstruct, or substantially improve real property that is secured by such debt and (b) debt resulting from the refinancing of qualified acquisition indebtedness to the extent the amount of such debt doesn’t exceed the amount of debt being refinanced.