Which debts are required to file a 1099-C with the IRS?

The requirement to file a 1099-C with the IRS applies specifically to debts that are forgiven or canceled, which typically includes debts that total $600 or more. This threshold is significant because it is the minimum amount that triggers the requirement for creditors to report the cancellation of debt to both the debtor and the IRS. When a debt is canceled, the amount that has been forgiven may be considered taxable income for the debtor, hence the need for the form.

Debts below the specified threshold, those that may not have been officially closed or written off, and those that are categorized differently, such as “currently not collectible” (CNC), do not meet the criteria for 1099-C filing. Understanding this threshold and requirement is critical for ensuring proper tax reporting and compliance with IRS regulations regarding canceled debt.