Since loans aren't considered taxable income, you’ll need to ask the sender for a corrected 1099-NEC showing a $0 balance. Then, make sure you save the corrected 1099-NEC in case you receive any notices from the IRS requesting information on the missing 1099-NEC income. Even though it is zero, you may get an automated letter that is sent out when the computer detects there should be a 1099-NEC entry.
