If you’re a farmer or a member of an agricultural cooperative, chances are you’ll encounter Form 1099-PATR (Taxable Distributions Received From Cooperatives) at tax time. This IRS form reports patronage dividends and other distributions, and it plays an important role in how you report income on your tax return.
Whether you’re a long-time co-op member or just received your first 1099-PATR, here’s what you need to know.
What Is Form 1099-PATR?
Form 1099-PATR is issued by cooperatives to report patronage dividends, per-unit retains, and other taxable distributions paid to members during the year. These payments often come from agricultural, rural utility, and other types of cooperatives.
The form is used to let both you and the IRS know how much taxable income you earned from your membership.
Who Receives a 1099-PATR?
You’ll typically receive a 1099-PATR if:
- You are a farmer, rancher, or agricultural producer who sells products through a co-op.
- You’re a member of a rural utility cooperative or another type of mutual association that issues patronage dividends.
- The cooperative paid you at least $10 in patronage dividends or other distributions during the tax year.
Why It Matters for Taxes
The amounts on your 1099-PATR must be reported as income. Depending on your situation:
- Farmers and ranchers may need to include the dividends in Schedule F (Profit or Loss From Farming).
- Other members may report the amounts on Schedule C or other income lines as applicable.
- If you received qualified written notices of allocation or per-unit retain allocations, they may still be taxable even if you didn’t receive cash right away.
Failing to report income from a 1099-PATR could lead to IRS penalties and interest.
Key Boxes on the 1099-PATR
- Box 1: Patronage dividends (cash, property, or credits allocated to you).
- Box 2: Nonpatronage distributions.
- Box 3: Per-unit retain allocations.
- Box 6: Domestic production activities deduction (DPAD) information, if applicable.
- Box 7+: Various credits or withholdings that may affect your tax return.
Always cross-check with your tax preparer to ensure each box is applied correctly.
How Farmers Should Prepare
- Keep your co-op statements throughout the year so you can reconcile them with the 1099-PATR.
- Work with a tax professional — especially if you have large patronage dividends or allocations.
- Understand timing: Sometimes allocations are taxable even before cash is received.
1099-PATR Software and Outsourcing Solutions
Filing Form 1099-PATR doesn’t have to be complicated. With 1099FIRE software, you can prepare and e-file quickly, or outsource the entire process to our experienced team. Whether you’re handling patronage dividends for farmers or co-op members, we’ll ensure your filings are accurate, on time, and fully IRS compliant.
Call our office at (480) 706-6474 to get started today.