IRS Reporting

Training Outline

Definition:

Tax information reporting is a requirement for financial institutions that create certain expenses and income for their members. CUProdigy offers assistance for this function, including many reporting tools that are available within the core. The tax files that are available include;

• 1042S- Foreign Person’s US Source Income Subject to Withholding
  

• 1098- Mortgage Interest Statement
  

• 1099A- Acquisition or Abandonment of Secured Property
  

• 1099C- Cancellation of Debt
  

• 1099INT- Interest Income
  

• 1099MISC- Miscellaneous Income
  

• 1099R- Distributions from Pensions, Annuities, Retirement or Profit-
  

Sharing Plans, IRAs, Insurance Contracts, etc.

• 1099SA- Distributions from an HSA, Archer MSA, or Medicare Advantage MSA,
  
• 5498- IRA Contribution Information
  

• 5498ESA- Coverdell ESA Contribution Information
  

• 5498SA- HSA, Archer MSA, or Medicare Advantage MSA Information
  

Timeline of events:

• Early December- CUProdigy will provide a checklist for the credit union’s tax reporting preferences. This is REQUIRED to be signed and returned to Client Support no later than 12/24 (even if no change from previous year)
  

• January (early to mid)-
  

15. Ascensus or IRA vendor requires the file containing FMV, 1099R, and 1099SA
    

15. All requested files will be sent to credit union’s statement vendor
    

15. Credit Union make any adjustments to member accounts (previous year dates must be updated by someone in Client Support)
    

• March-
  

15. Early March, files will be pulled within the system for credit union review
    

15. End of March- IRS Deadline for all tax reporting
    

• April- 5498ESA required by Ascensus
  

• May- 5498 and 5498SA required by Ascensus
  

For exact dates, contact Client Support. Email confirmation of all submission will be sent immediately following any transmission. If the credit union would like to review any files prior to the end of year, the files can be generated at any time and found in the report warehouse.

Roles:

Navigations
	System Configuration		IRS Reporting
	Account Type Maintenance		Accounts Payable
	Member Screen		Entity Maintenance

Permissions

Member Screen- Edit IRA Code

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IRS Reporting

Reports Available:

• All coordinating IRS reports for each tax file option
  

Procedure:

Setting up the System:

• Navigation: F3- System Config: General Configuration
  

15. It is here where all of the Tax Documentation Options will be; including minimums for the reporting and Credit Union IRS information.
    

INCLUDE 1099S & 1098S WITH STATEMENTS: check this box if tax statements can be included with statements

• This is specific to vendor capabilities and statement file. Check with statement vendor and CUProdigy to determine if this option is available.
  

FEDERAL EMPLOYER #: Enter full federal employer number

∙    Navigation: F3 - System Config: General Configuration

TRANSMITTER CONTROL CODE: This is a 5 digit alpha/numeric code assigned by the IRS to transmit electronically

TRANSMITTERoItisNAME:hereEnterwherenameallassociatedfthewithTaxTransmitterDocumentationControlCodeOptions will be; including minimums

STATE CODE:forEnterthestatereportingcodefor filingand Credit Union IRS information.

MIN DIVIDENDS ON 1099S: enter dollar amount that will be reported to the IRS ($10.00 reporting requirement)

∙    Navigation: F3- System Config: General Configuration

MIN INTEREST ON 1098S: enter dollar amount that will be reported to the IRS ($ 600.00 reporting requirement)

MIN AMOUNTItisONhere1099Awhere&C:enteralldollaroftheamountTaxthatDocumentationwillbereportedtoOptionstheIRS($ 600will.00be;reportingincludingrequirement)minimums o

MIN AMOUNT ON 1099 MISC: enter dollar amount that will be reported to the IRS ($ 600.00 reporting requirement) for the reporting and Credit Union IRS information.

CONTACT NAME: Contact name at the credit union regarding IRS filing

TITLE: Enter title of contact name

EMAIL: Enter email address of contact name

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IRS Reporting

• Navigation: F3- System Tables: Account Type Maintenance
  

15. It is here where a LOAN will be set up to have a 1098 processed or if a SHARE/CERTIFICATE is designated as an IRA for appropriate tax documents.
    

If a LOAN category is set, check the box to INCLUDE IN 1098 if needed.

All accounts with this suffix will be listed in the 1098 category. This flag is set at the account level and cannot be set or updated at the member level.

If a category is set to SHARE or CERTIFICATE, an IRA VALUES will be available. Use the drop down to select the IRA TYPE and IRA FLAG for each designated accounts.

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IRS Reporting

• Navigation: F3- System Tables: Certificate Type Maintenance
  

15. It is here where a CERTIFICATE will be set with an IRA Designation; however the driving factor for the suffix at the member level will be the flag set at the Account Type Maintenance.
    

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IRS Reporting

Designating a 1099-MISC:

15. Navigation: F3- Accounts Payable: Accounts Payable System
    

15. If an enity receives miscellaneous income from the credit union and a 1099MISC must be reported, all functionality for this process is done within Accounts Payable.
    

When setting up a new vendor or updating a current vendor in need of reporting, click the icon for VENDOR MAINT.

In the TAX INFO, enter the Tax ID and check

the box- 1099 NEEDED. This will allow the

monetary amount needed for each invoice

paid (at the time of the invoice)

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IRS Reporting

For a report of all pending

1099MISC information, use

the REPORTS dropdown

within Accounts Payable and

select 1099 REPORT.

Example of 1099 REPORT

Foreign Person for 1042s:

15. Navigation: F3- System Tables: Entity Maintenance
    

15. An entity that must be listed as a foreign person must have a flag set on the entity maintenance screen. Any accounts (for the primary account holder) linked to the entity will then receive a 1042s instead of a 1099INT.
    

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IRS Reporting

Check box for NON-RES ALIEN and enter the 2 digit IRS

code for Country of Residence.

Tax options from Member Screen:

15. Navigation: F12- Member Screen (Lookup)
    

15. Within the member screen, a 1099A & C can be entered and also verification of the amount of interest was paid/dividend received by member for YTD/LYTD information.
    

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IRS Reporting

15. To enter a 1099 A/C, use the MORE drop down at the loan level:
    

Select IRS 1099 EVENTS

Record Type: 1099-A

Event date: Date of either charge off or discharge date (will also determine which year the record will be included)

Amount: Amount of loan or charge off

FMV: Value of real estate being reported

Borrower personally liable: A checkmark here will provide indicator in file to IRS

Description: Place a description of the loan being discharged

Special Data: Free form field for additional information regarding debt

SAVE when complete. Record will appear in list on left (Under New, Copy, Delete)

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IRS Reporting

Record Type: 1099-C

Event date: Date of either charge off or discharge date (will also determine which year the record will be included)

Amount: Amount of loan or charge off

Interest: Amount of interest at the time of forgiveness

FMV: Value of real estate being reported

Identifiable Event Code: IRS configured codes

Borrower personally liable: A checkmark here will provide indicator in file to IRS

Description: Place a description of the loan being discharged

Special Data: Free form field for additional information regarding debt

SAVE when complete. Record will appear in list on left (Under New, Copy, Delete)

Can verify amount of interest in

LOAN expanded view.

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IRS Reporting

Can verify amount of dividends in

SHARE/DRAFT expanded view.

Can verify amount of dividends in

CERTIFICATE expanded view.

15. To change an IRA code within a member’s history
    

15. There are no restrictions on a timeframe in which a reporting code can be changed, although there is a permission (Member Screen- Edit IRA Code) needed to allow a user to complete the change.
    

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IRS Reporting

From the history on the member’s

screen, double click on the IRA Code that

must be changed.

Use the IRA CODE drop down to select the

appropriate code. Hit SAVE to complete

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IRS Reporting

The IRA Code is now

updated.

Processing Tax Records:

15. Navigation: F3- Other Period End Functions: IRS Reporting
    

15. Can select the files to generate. It is best to process one file at a time through this page. All reports will be stored in the warehouse.
    

Enter the TAX YEAR, select the

File(s) to Create and hit CREATE

FILES.

15. Navigation: F3- Other: Report Warehouse
    

15. All files generated will be available in the Report Warehouse. There will be 2 items for each File generated, the REPORT (PDF version to view) and the FILE (text- the approved format to submit to IRS).
    

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IRS Reporting

15. Text file is also typically used to send to statement vendor to process tax documents.
    

15. Filter with IRS to find all IRS generated reports.
    

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