What is a 1099 Correction?
Stash customers who owned certain securities that are subject to income reclassification for the appropriate tax year may receive a 1099 Correction form. Not everyone will receive a 1099 Correction, but if you do, you will need to replace the existing 1099 in your tax filing.
Keep reading for more information.
IMPORTANT: The 1099 Correction document that you may receive in March replaces the form you receive in February.
If you prefer filing your taxes early, it may be best to wait until you receive this form or consider filing an extension if you have any concerns.
Please consult a tax professional if you have any questions on how to file a 1099 Correction or for more information on your specific tax situation.
What is Income Reclassification?
Income reclassification is when a company changes all or part of previously reported dividend or interest income to another tax classification.
To put it simply, it is a change to how companies treat reported income for tax purposes.
Why do I need this different form?
The type of reported income may change after the original form is given to you. If this happens, our custodian (Apex) is required to reissue your 1099 form as a correction. If the type of income on your original 1099 document changes, you’ll need to let the IRS know.
You may be issued a 1099 Correction if a security you hold made a change to your income that was reported on the original 1099 form that you received in February.
If you did not receive a 1099 in February, but received a 1099 Correction as your first document, this means that the change in income was enough to be considered reportable and generate a document.
Why am I receiving this document?
This is a legal requirement. Stash Invest accounts are taxable brokerage accounts, and you are required by the IRS to report income earned from realized capital gains and losses and other applicable income.
For more information on this form, other forms you may receive, and relevant tax dates, check out The Tax Season Dates You Need to Know.
Stash does not provide legal or tax advice and if you have questions regarding your personal circumstances and the forms that you have received, you should consult a tax or legal professional.
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