Form 1099-C Deadlines 2026: A Simple Guide for Payers
Reporting canceled debt may not happen often, but when it does, timing matters. Form 1099-C is how lenders show the IRS that a borrower’s obligation has been forgiven and how borrowers confirm that same relief on their returns. This guide walks through the 2026 Form 1099-C due date, threshold, and filing rules, and practical steps to stay compliant.
Why 1099-C Deadlines Matter
When a lender forgives a borrower’s debt, it’s more than just closing a file; it’s closing a financial chapter that the IRS wants a record of. That’s where Form 1099-C (Cancellation of Debt) comes in.
Form 1099-C reports the amount of debt a lender has canceled of $600 or more and identifies the reason it was discharged, such as bankruptcy, settlement, or foreclosure. It serves as the official canceled debt report that lets the IRS and borrower record the same transaction on both ends.
Filing it on time isn’t optional. Missing a Form 1099-C due date can lead to an IRS penalty of up to $340 per form, or at least $680 per form for intentional disregard. So, delays can reach hundreds of dollars per form and affect tax filings.
But the cost isn’t just in terms of penalties. A late form often means confusion, frustrations, lost trust, and audit exposure.
Who Must File and When to Do It
Form 1099-C must be filed when an applicable entity cancels $600 or more of a debt due to an identifiable event.
Applicable entities include banks, credit unions, credit-card issuers, mortgage lenders, federal agencies, auto financiers, and other businesses for which lending money is a significant trade or business.
Note: Don’t add up separate debt cancellations (even for the same borrower) to see if you hit the $600 threshold. Only total them if they were deliberately split to dodge filing Form 1099-C.
Let’s take a look at some examples:
- A credit card company forgives $750 in unpaid charges after months of delinquency reportable.
- A lender settles a $5,000 auto loan for $3,000 reportable.
- A bank writes off $400 in overdraft fees not reportable (falls below threshold).
Form 1099-C Codes
Each 1099-C includes an event code (A–H) explaining why the debt was canceled.
| Event Code | What It Means | Example in Practice |
|---|---|---|
| A | Bankruptcy discharge | A borrower’s business loan balance of $8,000 is discharged in Chapter 13 reportable
Note: Do not report a debt discharged in bankruptcy unless records show it was business or investment debt. |
| B | Receivership or foreclosure court proceeding debt canceled or extinguished in a legal process | A court-appointed receiver finalizes proceedings that extinguish $12,500 of unpaid business debt. |
| C | Statute of limitations or deficiency period expired report only when a final court judgment upholds it and appeal period has ended | A court issues a final ruling that the creditor can no longer collect because the statute of limitations expired. |
| D | Creditor elects foreclosure remedies that bar further collection (e.g., nonjudicial foreclosure removing deficiency rights) | A lender completes a nonjudicial foreclosure under state law, barring pursuit of the remaining balance. |
| E | Estate settlement | A bank writes off a $4,500 balance after the borrower’s estate closes with insufficient funds. |
| F | Written agreement | A fintech lender and borrower sign a settlement forgiving $2,000 of a $5,000 BNPL debt. |
| G | Decision to stop collection | A credit-card issuer permanently discontinues collection and cancels the debt per internal policy. |
| H | Other actual discharge before an identifiable event not due to written settlement (F) or stop-collection policy (G) | Creditor issues a formal release of the balance before any events A–G occur. |
Exceptions: See IRS-listed exceptions, such as certain student loan discharges, related-party transfers, or guarantor releases.
2026 Form 1099-C Filing Deadlines
Here’s a compliance calendar in one view:
| Action for the Payer | Due Date | Pro Tip |
|---|---|---|
| Send Form 1099-C recipient copy to borrower | Feb 2, 2026 | Mail or e-deliver (with borrower consent). Early delivery prevents confusion. |
| Mail paper forms to the IRS | Mar 2, 2026 | Allowed if filing fewer than 10 total information returns or with an approved waiver (Form 8508). |
| E-file with the IRS | Mar 31, 2026 | Required under the 10-return e-file rule; count all information returns (W-2, 1099, 1098, etc.). |
| Request an extension using a Form 8809 extension | By the original due date March 2, 2026 (paper) or March 31, 2026 (e-file) | Request an extension of time to file with Form 8809; grants 30 extra days for IRS submission only (not borrower copies). |
If the regular due date falls on the weekend or on a legal holiday where the return is filed, the due date is the next business day.
Many institutions now e-file Form 1099-C through 1099Online, which submits directly to the IRS for fast and secure processing.
A Smart Three-Step Filing Process
Think of the 1099-C e-file process as three clean steps, each one setting up the next.
Step 1: Preparation (October–December 2025)
- List all charge-offs, settlements, and forgiven debts.
- Obtain and maintain the borrower’s legal name and TIN (for example, using Form W-9). TIN Matching doesn’t apply to Form 1099-C.
- Confirm each debt’s event code (A–H).
- Check Boxes 2–4 for total, interest, and description accuracy.
Step 2: Furnish Borrower Copies (January 2026)
- Generate and send Copy B through 1099Online.
- File Form 15397 by February 2, 2026 (the recipient due date for TY 2025 forms) to request a 30-day extension. Approval is required it’s not automatic and depends heavily on whether the reason given is justified.
- Use Form 8809 to request an extension of the deadline to file with the IRS.
Step 3: File with the IRS ( February–March 2026)
- Submit returns via 1099Online or the IRS IRIS Taxpayer Portal and retain the ‘Accepted’ acknowledgment for compliance records.
- Make sure to file accurate information returns with the IRS by March 31, 2026 (e-file deadline).
- If your electronic file is marked “Bad” (rejected), make the required changes and resubmit a replacement form. You get 60 days from the original transmission date to send an acceptable replacement if received within 60 days, the original transmission date is used for penalty determination. Originals submitted after the due date or replacements sent after 60 days may result in late-filing penalties.
Compliance isn’t about rushing; it’s about staying one step ahead.
Quick Pre-Filing Checklist
- Confirm all canceled debts of $600+ per borrower
- Assign the correct event code (A–H)
- Validate borrower TINs and addresses
- Double-check interest allocation (Box 3)
- Plan for e-filing if 10+ total returns are being filed
- Set reminders for February 2, March 2, and March 31 deadlines
1099-C Penalties: Tiered Amounts & What to Do If Delayed
Here’s a look at the Form 1099-C late fee (penalties), which follow the same tiered amounts as other information returns:
| Delay Window | Penalty per Form | What To Do If Delayed |
|---|---|---|
| Up to 30 days | $60 | File immediately and log the correction |
| 31 days – Aug 1 | $130 | File as soon as possible with a written explanation (e.g., vendor issue) |
| After Aug 1 | $340 | Request relief under the reasonable-cause rule with documentation |
| Intentional disregard | $680+ | Maintain SOPs and evidence of effort to contest fines |
Using a filing platform like 1099Online helps organize deadlines and submissions in one place, so 1099-C filing deadlines aren’t missed.
Real-World Scenarios
| Situation | Amount Canceled | Box 6 Code | Payer Action | Notes |
|---|---|---|---|---|
| Small-business loan closed after long non-payment | $3,800 | G | File Form 1099-C | The borrower may qualify for bankruptcy or insolvency exclusion |
| BNPL plan settled in writing | $950 | F | File Form 1099-C after the signed settlement | The trigger is the executed agreement |
| Auto loan deficiency canceled after repossession and sale | $7,200 | G | File Form 1099-C | Note: If the cancellation is in connection with a foreclosure or abandonment of secured property and Form 1099-A would otherwise be required, complete Boxes 4, 5, and 7 on Form 1099-C (and do not also file Form 1099-A).
If Form 1099-A isn’t required (for example, a personal-use car), just file Form 1099-C to report the canceled deficiency amount. |
| Medical balance cleared under a hardship program | $1,450 | Generally, do not file Form 1099-C | Hospitals are generally not “applicable entities,” so 1099-C isn’t required | |
| Peer-to-peer loan defaulted and forgiven | $2,100 | G | File Form 1099-C only if you are an applicable lending entity | Confirm you meet the “applicable entity” test |
Overall, remember the following:
- File Form 1099-C when $600 or more of a single debt is canceled due to an identifiable event.
- Do not add smaller cancellations together unless they were split to avoid reporting.
- Borrowers may exclude canceled debt income in limited cases, such as bankruptcy or insolvency.
FAQs
1. Do smaller cancellations add up?
No. Each cancellation is counted on its own for the $600 rule. Only combine them if the amounts were split up on purpose to avoid filing Form 1099-C. You only need to file Form 1099-C when $600 or more of a single debt is canceled due to an identifiable event.
2. Can borrower copies be delayed?
Only for valid reasons. File Form 15397 by Feb 2, 2026, to request a 30-day extension. Approval required.
3. Does the 10-return e-file rule apply if I file 9 1099-Cs and 1 W-2?
Yes. The IRS counts all information returns together. Once ten is hit, every form, including 1099-C, must be e-filed.
4. How to fix the wrong amount?
If an error is discovered, such as the wrong canceled amount, event code, or interest allocation, file a Corrected Form 1099-C, send the revised borrower copy, and resubmit quickly to stay within the lowest penalty range.
5. Does Form 1099-C involve withholding?
No. Form 1099-C has no box for federal income tax withheld. The Box 4 in Form 1099-C is for “Debt description.” Backup withholding is generally not applicable to canceled debt.
The Bottom Line
Each Form 1099-C is a record of closure, a signal that both lender and borrower have resolved an obligation. Filing it correctly ensures the IRS, the borrower, and the payer are aligned.
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