If you received a Form 1099-C, this amount is generally reported as income on your return. Form 1099-C is received when a debt (home, credit card, student loan, etc.) is cancelled. When this happens, it means that you received money when the debt was initially incurred, but you never had to pay it back. Because you are not paying the debt back, the IRS considers the original debt to be income, and it must be reported on your return.
To enter a 1099-C in our program go to:
- Federal Section
- Income (Enter Myself)
- Less Common Income
- Cancellation of Debt Form 1099-C, Form 982
Please note that there are certain circumstances when you can exclude the cancelled debt from your income.
For information about these circumstances, click here.