Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 2
Is there any limitation on how late a corrected 1099 can be issued?


Aren't companies and brokers supposed to report this information in a timely manner?

Yes. But don't blame your broker on this one. The difference between return of capital and qualified dividends is something that has to come from the company. If the company has retained earnings, they can pay qualified dividends. If the company's retained earnings is zero or negative, payments must be return of capital and not dividends.

So I'd lay the fault for this correction on the company, not the broker.

Side note - If a company can't tell whether they have retained earnings or not within 90 days of year end, there's a problem with their management. And if there's a problem with management, that's not a company I want to own.

Since it is obviously well past the April 15 deadline; what are the rules on when I need to file an amended return and how do I avoid penalties?

The penalty for late payment is 0.5% of the tax due per month late, with a maximum of 25% of the late tax. On $6, your maximum penalty is $1.50. The IRS has discretion to waive penalties, which they would probably do for you in this case.

There's also interest, which is currently at 3% annually. At roughly 6 months late, the interest on your $6 of tax would be about a dime, give or take a penny or two.

Frankly, I wouldn't bother. The IRS generally will ignore balances below $5, and I've heard rumors the threshold is closer to $10.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.