439852
We issued an 80,000 loan to an employee in 2017 and have included a 4 year forgiveness schedule, with the first date of forgiveness being 12/31/2018. Do we issue him a 1099 for 2017 for the full 80,000? Or do we issue him a 1099 in 2018 for the amount of the forgiveness?
You'll need to sign in or create an account to connect with an expert.
You add the amount of the forgiven loan to their W-2 box 1 income each year, and deduct the appropriate payroll tax (employer share of FICA and medicare tax), as well as federal and state withholding.
Basically, treat it as a cash bonus and apply the same withholding rules.
Because this is an employee, anything of value that you provide to an employee in return for their services is considered taxable wages.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
NonnaK
New Member
dougmonger
New Member
nakeshalewis97
New Member
JerryChicago
Level 2
L570
New Member