topic What is section 199A dividends in Box 5 on Form 1099-DIV? in Get your taxes done using TurboTax

What is section 199A dividends in Box 5 on Form 1099-DIV?

meiandykhui — Mon, 03 Jun 2019 20:16:22 GMT

It was added to the 1099-DIV this year in order to aid in...

KrisD — Mon, 03 Jun 2019 20:16:23 GMT

It was added to the 1099-DIV this year in order to aid in the calculation of Section 199A, also known as the Qualified Business Income Deduction.

According to the IRS:

"New box 5 section 199A dividends. Box 5, section 199A dividends, must be completed to report section 199A dividends paid to the recipient. The amount paid is also included in box 1a."

https://www.irs.gov/pub/irs-prior/i1099div--2018.pdf

Re: It was added to the 1099-DIV this year in order to aid in...

choeni1216 — Sun, 09 Feb 2020 22:56:36 GMT

Every year I get $25 from my old employer. This year when I got my 1099 Dividend form all the boxes except #5, which contained $25 in it, were blank. After completing my taxes, Turbo kept noting I needed to "review" a section. I ended up paying extra to speak with a person. I was told to just enter the $25, as I had done and continue, which I did. Still, got the message that it needed to be reviewed. Was told to disregard it and continue. I did. This was the only review required; however, when I went to "e-file", I kept getting thrown out and told I had to mail my return do to the failure to "review". Is my 1099 incorrect or is there no process in Turbo to "fix" this so I can file electronically. Seems that I wasted $20 to talk to someone who could not correct the problem and is making me nervous that my tax return is incorrect.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

JamesG1 — Sun, 09 Feb 2020 23:18:19 GMT

What version of TurboTax are you using?

I would suspect that you would need Deluxe, Premier, or above to compute the QBI deduction that Section 199A dividends incur.

From this IRS Publication here.

“Below are answers to some basic questions about the new qualified business income (QBI) deduction, also known as the section 199A deduction, that may be available to individuals, including many owners of sole proprietorships, partnerships and S corporations. Some trusts and estates may also be able to take the deduction. This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.”

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

Anonymous — Sun, 09 Feb 2020 23:21:49 GMT

certain dividends from Real Estate Investment Trusts (non-qualified) also included in box 1 total dividends. if it's small and you don't want to bother with the 199A deduction (20%) that it produces leave box 5 blank

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

choeni1216 — Mon, 10 Feb 2020 00:22:56 GMT

Thanks for the quick response. I am already using Turbo Tax Live Deluxe. This cost an additional $20 for talking to a "live" person to correct any errors. However, as noted earlier, the person I spoke with didn't correct this and just told me hit continue. Turbo is still telling me I needed to revisit this section and correct it. I cannot e-file since I can't fix it. Turbo is telling me since I haven't fixed it that I have to mail my taxes. I was going to do that but I have been using Turbo for the last 7 years and other than the 5 printed Turbo pages, I do not know what attachments to send. I used to have to file 1099 forms, donation worksheets, etc. I spent $140 on this and for the first time, I do not feel comfortable filing because I am afraid of an error.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

JamesG1 — Mon, 10 Feb 2020 02:36:39 GMT

What version of TurboTax are you using?

I would suspect that you would need Deluxe, Premier, or above to compute the QBI deduction that Section 199A dividends incur.

TurboTax Online Deluxe will support Form 8995-A, Qualified Business Income Deduction but the form is not expected to be available until February 20, 2020.

See here.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

golfer1john — Sun, 16 Feb 2020 22:03:13 GMT

On what form do I deduct the 20%?

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

JohnW222 — Sun, 16 Feb 2020 22:26:18 GMT

TurboTax will compute QBI for you.

If you qualify for a qualified business income deduction, it'll appear on line 10 of Form 1040.

To see if you qualify for the deduction, please see the TurboTax Help article "Do I qualify for the qualified business income deduction?".

Re: It was added to the 1099-DIV this year in order to aid in...

Smigel — Tue, 14 Apr 2020 15:16:18 GMT

You are absolutely correct that this is a problem with TurboTax. I agree no one should have to pay for an error in their system. Filers should not have to pay TurboTax anything to fix this. The way I went around it was to put in a random state with a zero then it let me through. If this happens next year, I will find a different company to use. At least they could explain the error but you are right, anything you do, TurboTax won't allow you to pass unless you rig the system.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

Captain Randy — Wed, 24 Feb 2021 04:19:39 GMT

Just as an update for this thread for 2020 taxes. QBI deductions are now on Form 1040 line 13 and TurboTax Deluxe handles QBI for 199A dividends and completes Form 8995. If you receive a 1099 Div with a Line 5 amount just check Form 1040 line 13 to determine if you got the deduction. Under most circumstances the deduction amount should be 20% of the Line 5 amount.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

thiaroche — Sun, 14 Mar 2021 20:52:10 GMT

I have Section 199A Dividends and 20% of the amount is on 1040 line 13 as a deduction which reduces my taxable income. Form 8995-A calculated the deduction. I cannot file electronically until I complete form 1099 Misc which pops up for me to complete. Is this correct? This form asks for the EIN number and Payer's Name. I do not have this information for Vanguard. My statement from Morgan Stanley has the CUSIP number. Also, schedule 8995-A is not listed on the 1099 MISC worksheet so should I select Other Income in Box 3 of for 1099 MISC worksheet?

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

DanielV01 — Sun, 14 Mar 2021 21:14:25 GMT

REIT dividends that are reported in Box 5 of the 1099-DIV do qualify for the Section 199-A deduction. You don't need to fill out a 1099-MISC in the system, but rather a 1099-DIV (which will show the REITs in Box 5). If the system is asking for the EIN, look on page 1 of your consolidated form, likely at the very top (and quite likely in small print). Most brokerages do have that information on the form.

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

jquest — Mon, 15 Mar 2021 20:03:37 GMT

I have a dilemma. On my 1099DIV I was mailed by my financial group, box 5 had a dollar value, but when I downloaded from my financial group into Turbo box 5 was blank. I have mutual funds that do hold REIT's. Which do I believe, the actual paper I received from the financial group or the downloaded version?

Re: What is section 199A dividends in Box 5 on Form 1099-DIV?

Irene2805 — Mon, 15 Mar 2021 20:13:29 GMT

There might have been a transmission error with the download. Compare the imported information with the actual paper copy and go by the paper copy.

@jquest