1099-c forms arrived after I filed with TT. What do I do?

[npierson7]

You most likely need to maned your tax return. In most situations, if you receive a Form 1099-C from a lender after negotiating a debt cancellation with them, you'll have to report the amount on that form to the Internal Revenue Service as taxable income.

Canceled, forgiven, or discharged debt is considered taxable income unless it qualifies for either an exclusion or an exception.

Debt that qualifies for an exclusion:

• Cancelation of qualified principal residence indebtedness (as mortgage debt relief). In this scenario, TurboTax will complete Form 982 and include it with your return.
• Debt canceled under Title 11 bankruptcies*
• Debt (the amount exceeding your assets) canceled during insolvency*
• Cancelation of qualified farm or real property indebtedness*

*You can report this type of excludable debt in the TurboTax CD/Download software; it's not supported in TurboTax Online or the mobile app. Due to the complexity of this topic, we recommend consulting a tax professional. Also see IRS Publication 4681 for more info.

When to Use Tax Form 1099-C for Cancellation of Debt

[stratdx]

Thank you for this info. I received an email from turbo tax informing me that a portion of my unemployment from 2020 is tax free and that the IRS will be amending my return. Should I still amend my return for the 1099-c or wait until the IRS amends my filing for the non taxes unemployment? Thank you!

[LinaJ2020]

As of today, IRS changes the updates.  If you have already filed your 2020 Form 1040 or 1040-SR, you should not file an amended return at this time.  Instead of sending your refund directly, they will issue additional guidance as soon as possible.

See IRS link, click here:  https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

For TurboTax program, to sign up for being notified for the updates, click here: Unemployment exclusion

I will suggest you to hold on to the 1099-C and wait for the final updates from the IRS.