What form do I use to file student loan discharge 1099-c and 1099-misc?

[HowardSinger]

Hello,

I carried two loans with Discover Student Loans and they chose to discharge my loans when they decided to get out of the student loan business. Some people were transferred to another lender, but mine was not. I was sent two letters that explained that my loans had been discharged and reported to the IRS as paid in full. They also notified me that I would receive a 1099-c for both loans I had with them, which I did. I know under ARPA, all student loans that are discharged between December 2020 and December 31, 2025 are tax empt from being considered taxable income through January 1, 2026. My dilemma is that I don’t know how or where to report/file these 1099s on my taxes this year. I’ve never had a debt discharged before this. I also received a 1099-MISC from them because they had found they somehow undercharged me for something related to those loans and I had a remaining balance floating around somewhere that also needed to be reported as discharge (or at least I assume that’s what it’s for). Can you please explain the difference between the 1099-c and 1099-MISC  forms and how I should go about reporting them on my 1040? 

[AmyC]

1. How to report: 

• Enter the 1099-C and go through the questions, it will exempt your income and not be reported. How do I enter a 1099-C?
• Add the 1099-MISC and then subtract it out as a negative other income with a description.

Follow these steps to enter the 1099-MISC:

1. Log in to your return.
2. Go to income
3. Scroll down to Other Common Income
4. Select Income from 1099-MISC
5. Edit/ Start/ Revisit
6. Enter income -the income should be in box 3,
7. Enter tax if any withheld in box 4
8. Continue
9. Describe the reason -
10. continue
11. None of these apply
12. Continue
13. Did this involve main job?
14. No -this is for the worksheet to get the right answer despite it being your job
15. Continue
16. How often do you get?
17. Got in 2024 - even if you receive this each year so the program won't think this is another job
18. Continue
19. Intent to earn money?
20. No again, obviously you work for money but this needs to be no for the worksheets
21. Continue
22. Do you have another?
23. No
24. Continue

Follow these steps to subtract the income:

1. go to the federal income section
2. scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, Start
6. Other taxable income?
7. Select YES
8. Description  - whatever you want to say, something like -nontaxable student debt
9. Amount, enter your amount with a negative in front
10. Continue

2. 1099- and 1099-MISC forms

Topic 431  states: After a debt is canceled, the creditor may send you a Form 1099-C, Cancellation of Debt showing the amount canceled and date of cancellation.

About Form 1099-MISC, Miscellaneous Income  states: File Form 1099-MISC for each person to whom you have paid during the year:

• At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
• At least $600 in:
  • Rents.
  • Prizes and awards.
  • Other income payments.
  • and more items are listed