IRS Instruction 1099-PATR

IRS Instruction 1099-PATR – Cooperatives use Form 1099-PATR to report taxable distributions, primarily patronage dividends, to their patrons (members). If you run or belong to a cooperative—such as a farm, agricultural, or consumer co-op—understanding the IRS Instructions for Form 1099-PATR is essential for accurate tax reporting and compliance.

This comprehensive 2026 guide (covering the 2025 tax year) breaks down who must file, key deadlines, box-by-box instructions, special rules for Section 199A deductions, and tax implications for recipients. All information draws directly from the official IRS Instructions for Form 1099-PATR (Rev. April 2025), a continuous-use document for tax year 2025 and beyond.

What Is Form 1099-PATR?

Form 1099-PATR, titled Taxable Distributions Received From Cooperatives, reports payments cooperatives make to patrons that may be taxable. These include:

  • Patronage dividends
  • Per-unit retain allocations
  • Other qualifying distributions under IRC Section 6044(b)

Cooperatives issue the form only for items properly passed through to patrons for reporting on their individual tax returns. Dividends on capital stock go on Form 1099-DIV instead.

The form helps the IRS track income from cooperative transactions and ensures patrons report it correctly.

Who Must File Form 1099-PATR?

A cooperative must file Form 1099-PATR for each patron if it paid:

  • At least $10 in patronage dividends or other distributions described in Section 6044(b), or
  • Any amount subject to backup withholding (regardless of the payment size)

Key exceptions:

  • Payments to corporations, tax-exempt organizations (including HSAs, Archer MSAs, Coverdell ESAs), or government entities generally do not require filing.
  • Consumer cooperatives primarily engaged in retail sales of goods/services for personal use may apply for an exemption using Form 3491.

Report only income, expenses, and credits passed through to patrons. Do not include non-qualifying items.

2026 Filing Deadlines for Form 1099-PATR (2025 Tax Year)

Because January 31, 2026, falls on a weekend, deadlines shift to the next business day:

  • To recipients (Copy B): February 2, 2026
  • Paper filing with IRS: March 2, 2026 (or February 28 in some references—confirm with IRS)
  • Electronic filing with IRS: March 31, 2026

The IRS provides an online fillable Copy B at IRS.gov/Form1099PATR for easier recipient statements. Always verify exact dates on IRS.gov, as they adjust for holidays.

Tip: Electronic filing is encouraged and often required for large volumes (250+ forms).

How to Complete Form 1099-PATR: Box-by-Box Instructions

Follow these specific instructions from the IRS:

  • Box 1 – Patronage Dividends: Report the patron’s share of patronage dividends paid in cash, qualified written notices of allocation (face amount), and other property (excluding nonqualified notices). These must be deductible under Section 1382(b)(1).
  • Box 2 – Nonpatronage Distributions: For Section 521 farmers’ cooperatives only—report distributions from nonpatronage sources (including U.S. government business) paid on a patronage basis.
  • Box 3 – Per-Unit Retain Allocations: Report per-unit retains paid in cash, qualified certificates, or other property (excluding nonqualified).
  • Box 4 – Federal Income Tax Withheld: Enter backup withholding amounts (e.g., when the patron failed to provide a correct TIN).
  • Box 5 – Redeemed Nonqualified Notices: Report redemptions of nonqualified written notices of allocation or per-unit retain certificates paid as patronage or per-unit allocations.

For Specified Agricultural or Horticultural Cooperatives (Section 199A(g)):

  • Box 6 – Section 199A(g) Deduction: Pass through the patron’s share of the cooperative’s Section 199A(g) deduction (up to 9% of qualified payments in Box 7). Do not reduce Boxes 1 or 3 by this amount.
  • Box 7 – Qualified Payments: Report qualified payments to the patron.
  • Box 8 – Section 199A(a) Qualified Items: Report qualified items from non-SSTB trades or businesses.
  • Box 9 – Section 199A(a) SSTB Items: Report items from specified service trades or businesses (SSTBs) separately.
  • Box 10 – Investment Credit: Patron’s share of investment credit.
  • Box 11 – Work Opportunity Credit: Patron’s share of work opportunity credit.
  • Box 12 – Other Credits and Deductions: List additional items like empowerment zone credits or small refiner deductions.
  • Box 13 – Specified Cooperatives: Check this box if the cooperative qualifies under Section 199A(g)(4)(A).

Include the payer’s and recipient’s name, address, TINs, and an account number if applicable. You may truncate the recipient’s TIN on statements to patrons but not on IRS copies.

Tax Implications for Recipients (Patrons)

If you receive a Form 1099-PATR:

  • Report amounts from Boxes 1, 2, 3, and 5 as ordinary income on your tax return (e.g., Schedule F for farmers or Schedule 1 for other income).
  • Patronage dividends from personal (non-business) purchases are often not taxable—subtract them from the cost of goods or reduce basis in depreciable assets.
  • Use Boxes 6–9 for qualified business income (QBI) deduction calculations on Form 8995 or 8995-A.
  • Backup withholding in Box 4 is creditable against your tax liability.

Consult IRS Publication 225 (Farmer’s Tax Guide) or a tax professional for specific situations.

Penalties and Common Mistakes to Avoid

Failure to file or furnish correct forms can result in significant penalties, which increase with the delay. Common issues include:

  • Incorrect TINs
  • Missing forms for $10+ distributions
  • Improper reporting of Section 199A items

Refer to the General Instructions for Certain Information Returns for full penalty details and correction procedures.

Resources and Next Steps

For the latest updates, visit IRS.gov/Form1099PATR or consult a qualified tax advisor. Accurate reporting protects both cooperatives and their members from compliance issues.

This guide is for informational purposes only and is not tax advice. Tax laws can change—always verify with official IRS sources.