Form 1099-C: Cancellation of Debt, Codes and Exclusions
Form 1099-C reports a canceled debt: the IRS instructions (Rev. April 2025) have a creditor file one for each debtor for whom it canceled a debt owed to it of $600 or more if it is an entity the instructions list and an identifiable event has occurred, and box 6 carries a code from A to H for the event. Publication 1099 (2026) gives January 31 for the debtor’s copy and February 28 for the IRS (March 31 if filed electronically); exclusions such as bankruptcy and insolvency are covered in Publication 4681.
Maintained by Archie Chang · Sources checked against IRS text on November 2, 2026 · Methodology & sources
What Form 1099-C reports
The IRS About Form 1099-C page puts the filing rule in one passage:
“File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if:
You are an applicable financial entity.
An identifiable event has occurred.”
The instructions repeat it with the $600 amount and say what an identifiable event is. They also say the form is filed whether or not the debtor has to report the debt as income:
“File Form 1099-C, Cancellation of Debt, for each debtor for whom you canceled a debt owed to you of $600 or more if:
1. You are an entity described under Who Must File, later; and
2. An identifiable event has occurred. It does not matter whether the actual cancellation is on or before the date of the identifiable event. See When Is a Debt Canceled, later.”
“Form 1099-C must be filed regardless of whether the debtor is required to report the debt as income.”
“The debtor may be an individual, corporation, partnership, trust, estate, association, or company.”
The instructions and the form are the April 2025 revision. The instructions say how long that revision stays in use, and the form is marked “Rev. April 2025”:
“Continuous-use revision. Use these instructions for tax year 2025 and subsequent years until a superseding revision is issued.”
Who files Form 1099-C
The instructions answer with a list of six kinds of filers under Who Must File. The whole list is quoted here; the safe harbor rules that follow item 6 in the instructions are not reproduced.
“File Form 1099-C if you are any of the following.
1. A financial institution described in section 581 or 591(a) (such as a domestic bank, trust company, building and loan association, or savings and loan association).
[…]
2. A credit union.
3. Any of the following, its successor, or subunit of one of the following.
a. Federal Deposit Insurance Corporation.
b. National Credit Union Administration.
c. Any other federal executive agency, including government corporations.
d. Any military department.
e. U.S. Postal Service.
f. Postal Rate Commission.
4. A corporation that is a subsidiary of a financial institution or credit union, but only if, because of your affiliation, you are subject to supervision and examination by a federal or state regulatory agency.
5. A federal government agency including:
a. A department,
b. An agency,
c. A court or court administrative office, or
d. An instrumentality in the judicial or legislative branch of the government.
6. Any organization whose significant trade or business is the lending of money, such as a finance company or credit card company (whether or not affiliated with a financial institution). The lending of money is a significant trade or business if money is lent on a regular and continuing basis. Regulations section 1.6050P-2(b) lists three safe harbors under which reporting may not be required for the current year. See Safe harbor rules next.”
“Safe harbor rules. The three safe harbor rules in which an entity will not be considered to have a significant trade or business of lending money are the following.”
The $600 amount, joint debts and what counts as the debt
| Item | Amount in the IRS instructions | Where |
|---|---|---|
| Debt canceled for a debtor | $600 or more | Specific Instructions for Form 1099-C |
| Debtors jointly and severally liable for a debt incurred after December 31, 1994 | $10,000 or more: the entire canceled amount goes on each debtor’s form | Multiple Debtors |
“Do not combine multiple cancellations of a debt to determine whether you meet the $600 reporting requirement unless the separate cancellations are under a plan to evade the Form 1099-C requirements.”
“For debts of $10,000 or more incurred after December 31, 1994, that involve debtors who are jointly and severally liable for the debt, you must report the entire amount of the canceled debt on each debtor’s Form 1099-C.”
“A debt is any amount owed to you, including stated principal, stated interest, fees, penalties, administrative costs, and fines. The amount of debt canceled may be all or only part of the total amount owed. However, for a lending transaction, you are required to report only the stated principal.”
“Do not file Form 1099-C when fraudulent debt is canceled due to identity theft. Form 1099-C is to be used only for cancellations of debts for which the debtor actually incurred the underlying debt.”
“If, in the same calendar year, you cancel a debt of $600 or more in connection with a foreclosure or abandonment of secured property, it is not necessary to file both Form 1099-A, Acquisition or Abandonment of Secured Property, and Form 1099-C for the same debtor. You may file Form 1099-C only. You will meet your Form 1099-A filing requirement for the debtor by completing boxes 4, 5, and 7 on Form 1099-C. However, you may file both Forms 1099-A and 1099-C; if you do file both forms, do not complete boxes 4, 5, and 7 on Form 1099-C.”
Box 6 identifiable event codes A to H
Box 6 holds one code for the event. The instructions list the identifiable events under When Is a Debt Canceled?, and the form’s recipient copy and Publication 4681 give each code a short name:
“A debt is deemed canceled on the date an identifiable event occurs or, if earlier, the date of the actual discharge if you choose to file Form 1099-C for the year of cancellation. An identifiable event is one of the following.”
| Box 6 code | Name on the recipient copy and in Publication 4681 | Identifiable event in the instructions |
|---|---|---|
| A | Bankruptcy | A discharge in bankruptcy under title 11 of the U.S. Code. For information on certain discharges in bankruptcy not required to be reported, see Exceptions, later. Enter “A” in box 6 to report this identifiable event. |
| B | Other judicial debt relief | A cancellation or extinguishment making the debt unenforceable in a receivership, foreclosure, or similar federal nonbankruptcy or state court proceeding. Enter “B” in box 6 to report this identifiable event. |
| C | Statute of limitations or expiration of deficiency period | A cancellation or extinguishment when the statute of limitations for collecting the debt expires, or when the statutory period for filing a claim or beginning a deficiency judgment proceeding expires. Expiration of the statute of limitations is an identifiable event only when a debtor’s affirmative statute of limitations defense is upheld in a final judgment or decision of a court and the appeal period has expired. Enter “C” in box 6 to report this identifiable event. |
| D | Foreclosure election | A cancellation or extinguishment when the creditor elects foreclosure remedies that by law extinguish or bar the creditor’s right to collect the debt. This event applies to a mortgage lender or holder who is barred by local law from pursuing debt collection after a “power of sale” in the mortgage or deed of trust is exercised. Enter “D” in box 6 to report this identifiable event. |
| E | Debt relief from probate or similar proceeding | A cancellation or extinguishment making the debt unenforceable under a probate or similar proceeding. Enter “E” in box 6 to report this identifiable event. |
| F | By agreement | A discharge of indebtedness under an agreement between the creditor and the debtor to cancel the debt at less than full consideration (for example, short sales). Enter “F” in box 6 to report this identifiable event. |
| G | Decision or policy to discontinue collection | A discharge of indebtedness because of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. A creditor’s defined policy can be in writing or an established business practice of the creditor. A creditor’s established practice to stop collection activity and abandon a debt when a particular nonpayment period expires is a defined policy. Enter “G” in box 6 to report this identifiable event. |
| H | Other actual discharge before identifiable event | Other actual discharge before identifiable event. Enter “H” in box 6 if there is an other actual discharge before one of the identifiable events listed above. |
Box by box
| Box | Label on the form | Recipient copy (Instructions for Debtor) |
|---|---|---|
| Box 1 | Date of identifiable event | Shows the date the earliest identifiable event occurred or, at the creditor’s discretion, the date of an actual discharge that occurred before an identifiable event. See the code in box 6. |
| Box 2 | Amount of debt discharged | Shows the amount of debt either actually or deemed discharged. Note: If you don’t agree with the amount, contact your creditor. |
| Box 3 | Interest, if included in box 2 | Shows interest if included in the debt reported in box 2. See Pub. 4681 to see if you must include the interest in gross income. |
| Box 4 | Debt description | Shows a description of the debt. If box 7 is completed, box 4 also shows a description of the property. |
| Box 5 | Check here if the debtor was personally liable for repayment of the debt | Shows whether you were personally liable for repayment of the debt when the debt was created or, if modified, at the time of the last modification. See Pub. 4681 for reporting instructions. |
| Box 6 | Identifiable event code | Shows the reason your creditor has filed this form. The codes in this box are described in more detail in Pub. 4681. A—Bankruptcy; B—Other judicial debt relief; C—Statute of limitations or expiration of deficiency period; D—Foreclosure election; E—Debt relief from probate or similar proceeding; F—By agreement; G—Decision or policy to discontinue collection; or H—Other actual discharge before identifiable event. |
| Box 7 | Fair market value of property | If, in the same calendar year, a foreclosure or abandonment of property occurred in connection with the cancellation of the debt, the fair market value (FMV) of the property will be shown, or you will receive a separate Form 1099-A. Generally, the gross foreclosure bid price is considered to be the FMV. For an abandonment or voluntary conveyance in lieu of foreclosure, the FMV is generally the appraised value of the property. You may have income or loss because of the acquisition or abandonment. See Pub. 4681 for information about foreclosures and abandonments. If the property was your main home, see Pub. 523, available at www.irs.gov/Pub523, to figure any taxable gain or ordinary income. |
Due dates
The instructions say which year the form covers. Publication 1099 (2026) gives the dates in its Guide to Information Returns: the debtor’s copy by January 31, and the IRS copy by February 28, or March 31 if filed electronically, according to the footnote under the table.
“File Form 1099-C in the year following the calendar year in which the identifiable event occurs. See Exceptions, later. If you cancel a debt before an identifiable event occurs, you may choose to file Form 1099-C for the year of cancellation.”
“1099-C Cancellation of Debt Cancellation of a debt owed to a financial institution, the federal government, a credit union, RTC, FDIC, NCUA, a military department, the U.S. Postal Service, the Postal Rate Commission, or any organization having a significant trade or business of lending money. $600 or more February 28* January 31”
“* The due date is March 31 if filed electronically.”
“If any filing due date in these instructions falls on a Saturday, Sunday, or a legal holiday, you will be considered to have timely filed if you file by the next day that is not a Saturday, Sunday, or a legal holiday. Legal holidays for this purpose are legal holidays in the District of Columbia or a statewide legal holiday where the return is required to be filed. Also, a leap year does not extend the filing deadline. Dates of February 28 in these instructions remain February 28 even in leap years; the due date does not become February 29.”
The February 28 and March 31 dates are the same ones used on the 1099 reporting thresholds page.
What the filer is not required to report
The instructions list nine exceptions. The table gives their headings only, and the instructions give the conditions for each one. A few are quoted below with their qualifiers.
“You are not required to report on Form 1099-C the following.”
| No. | Heading |
|---|---|
| 1 | Certain bankruptcies. |
| 2 | Interest. |
| 3 | Nonprincipal amounts. |
| 4 | Foreign debtors. |
| 5 | Related parties. |
| 6 | Release of a debtor. |
| 7 | Guarantor or surety. |
| 8 | Seller financing. |
| 9 | Student loan indebtedness. |
“You are not required to report a debt discharged in bankruptcy unless you know from information included in your books and records that the debt was incurred for business or investment purposes.”
“Interest. You are not required to report interest. However, if you choose to report interest as part of the canceled debt in box 2, you must show the interest separately in box 3.”
“For a lending transaction, you are not required to report any amount other than stated principal.”
“Exceptions. Until further guidance is issued, no penalty will apply for failure to file Form 1099-C, or provide statements to debtors, for amounts:
Discharged in nonlending transactions, or
Forgiven under the terms of a debt obligation.”
“Penalties. There are penalties for failure to file correct information returns by the due date and for failure to furnish correct payee statements. See part O in the current General Instructions for Certain Information Returns for details.”
If you receive a Form 1099-C
The debtor’s copy carries a warning and a paragraph on what the form means for a tax return:
“This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported.”
“You received this form because a federal government agency or an applicable financial entity (a creditor) has discharged (canceled or forgiven) a debt you owed, or because an identifiable event has occurred that either is or is deemed to be a discharge of a debt of $600 or more. If a creditor has discharged a debt you owed, you are required to include the discharged amount in your income, even if it is less than $600, on the “Other income” line of your Form 1040 or 1040-SR. However, you may not have to include all of the canceled debt in your income. There are exceptions and exclusions, such as bankruptcy and insolvency. See Pub. 4681, available at www.irs.gov/Pub4681, for more details.”
“If an identifiable event has occurred but the debt has not actually been discharged, then include any discharged debt in your income in the year that it is actually discharged, unless an exception or exclusion applies to you in that year.”
Publication 4681 (2025) states the general rule and says what applies even when no Form 1099-C was received:
“Generally, if a debt for which you are personally liable is forgiven or discharged for less than the full amount owed, the debt is considered canceled in whatever amount it remained unpaid. There are exceptions to this rule, discussed under Exceptions, later. Generally, you must include the canceled debt in your income. However, you may be able to exclude the canceled debt. See Exclusions, later.”
“Even if you didn’t receive a Form 1099-C, you must report canceled debt as gross income on your tax return unless one of the exceptions or exclusions described later applies.”
Exclusions in Publication 4681 (2025) and Form 982
Publication 4681 (2025), dated November 19, 2025, is the IRS publication the Form 1099-C recipient copy points to. It describes exclusions and the Form 982 line for each:
“After you have applied any exceptions to the general rule that a canceled debt is included in your income, there are several reasons why you might still be able to exclude a canceled debt from your income.”
“In most cases, however, if you exclude canceled debt from income under one of these provisions, you must also reduce your tax attributes (certain credits, losses, and basis of assets) as explained later under Reduction of Tax Attributes.”
Bankruptcy (Form 982 line 1a)
“Debt canceled in a title 11 bankruptcy case isn’t included in your income. A title 11 bankruptcy case is a case under title 11 of the United States Code (including all chapters in title 11 such as chapters 7, 11, and 13). You must be a debtor under the jurisdiction of the court and the cancellation of the debt must be granted by the court or occur as a result of a plan approved by the court.”
“To show that your debt was canceled in a bankruptcy case and is excluded from income, attach Form 982 to your federal income tax return and check the box on line 1a.”
Insolvency (Form 982 line 1b)
“Don’t include a canceled debt in income to the extent that you were insolvent immediately before the cancellation.”
“You were insolvent immediately before the cancellation to the extent that the total of all of your liabilities was more than the FMV of all of your assets immediately before the cancellation.”
“Other exclusions must be applied before the insolvency exclusion. This exclusion doesn’t apply to a cancellation of debt that occurs in a title 11 bankruptcy case. It also doesn’t apply if the debt is qualified principal residence indebtedness (defined in this section under Qualified Principal Residence Indebtedness, later) unless you elect to apply the insolvency exclusion instead of the qualified principal residence indebtedness exclusion.”
“To show that you are excluding canceled debt from income under the insolvency exclusion, attach Form 982 to your federal income tax return and check the box on line 1b.”
Qualified farm indebtedness (Form 982 line 1c)
“You can exclude canceled farm debt from income on your 2025 return if all of the following apply.
The debt was incurred directly in connection with your operation of the trade or business of farming.
50% or more of your total gross receipts for 2022, 2023, and 2024 were from the trade or business of farming.
The cancellation was made by a qualified person.”
Qualified real property business indebtedness (Form 982 line 1d)
“You can elect to exclude canceled qualified real property business indebtedness from income. Qualified real property business indebtedness is debt (other than qualified farm debt) that meets all of the following conditions.”
Qualified principal residence indebtedness (Form 982 line 1e)
“Qualified principal residence indebtedness is any mortgage you took out to buy, build, or substantially improve your main home. It must also be secured by your main home.”
“The maximum amount you can treat as qualified principal residence indebtedness is $750,000 ($375,000 if married filing separately).”
| Line | Box label on the form |
|---|---|
| Line 1a | Discharge of indebtedness in a title 11 case |
| Line 1b | Discharge of indebtedness to the extent insolvent (not in a title 11 case) |
| Line 1c | Discharge of qualified farm indebtedness |
| Line 1d | Discharge of qualified real property business indebtedness |
| Line 1e | Discharge of qualified principal residence indebtedness (Caution: See instructions before checking this box if debt was discharged after 2017.) |
The home mortgage exclusion and its years
The three IRS documents below give the years for qualified principal residence indebtedness in different words. They were published at different times, and the 2026 Publication 4681 was only a draft when we checked on November 2, 2026. This page leaves open how any of them applies to a particular debt.
“Discharge of qualified principal residence indebtedness before 2026. Qualified principal residence indebtedness can be excluded from income for discharges before January 1, 2026.”
“Discharge of qualified principal residence indebtedness after 2025. Qualified principal residence indebtedness cannot be excluded
[…]
from income for discharges completed or discharge agreements entered into after December 31, 2025.”
“Discharge of qualified principal residence indebtedness before 2026. Qualified principal residence indebtedness can be excluded from income for discharges before January 1, 2026, or discharges subject to an arrangement that was entered into and evidenced in writing before January 1, 2026.”
“Only check the box on line 1e if the income you exclude is from discharge of qualified principal residence indebtedness and one of the following applies.
The debt was discharged before 2026.
The debt was discharged subject to an arrangement that was entered into and evidenced in writing before January 1, 2026.”
“Discharge of qualified principal residence indebtedness after 2025. Qualified principal residence indebtedness cannot be excluded from income for discharges
[…]
completed or discharge arrangements entered into after 2025. However, a discharge in 2026 can still be excluded from income if the discharge arrangement was entered into and evidenced in writing before 2026.”
Student loans
The Instructions for Forms 1099-A and 1099-C (Rev. April 2025), dated March 14, 2025, and Publication 4681 (2025), dated November 19, 2025, speak to student loans at different dates, and both are shown here as printed.
“Mortgage and student loan forgiveness relief expires in 2025. The exclusion from income of discharged mortgage debt for qualified principal residence indebtedness and qualified student loan debt under section 108(f)(5) expires on December 31, 2025.”
“Student loan indebtedness. For discharges occurring after December 31, 2017 and before January 1, 2021, you are not required to file Form 1099-C for student loan indebtedness if the discharge of the debt is due to the student’s death or permanent and total disability. From December 31, 2020, until January 1, 2026, you are not required to file Form 1099-C for student loan indebtedness if the discharged debt consists of:
a. Loans provided for post-secondary expenses by a government body (federal, state, territorial, or any subdivision thereof) or an eligible educational institution (as defined in section 24A);
b. Private educational loans;
c. Loans made by an educational organization which normally maintains a regular faculty, curriculum, and enrolled student body, the last of which attends educational activities at the place in which they are regularly carried on, for purposes described in sections 108(f)(5)(C)(i) and (ii); and
d. Loans made by an educational organization described in (c) above, or by a section 501(a) tax-exempt organization, if the loans were for refinancing purposes under a program as described in section 108(f)(5)(C)(iii).
Item (d) will not apply to loans made by a item (c) organization or a private education lender if they are provided in exchange for services performed for either lender.”
“Cancellation due to death or total and permanent disability of the student. If a student loan was discharged, the amount of the debt discharged on account of death or total and permanent disability of the student may be nontaxable. If the student loan is discharged after 2025, you will have to include your SSN on your tax return.”
“Special rule for student loan discharges for 2021 through 2025. The American Rescue Plan Act of 2021 modified the treatment of student loan forgiveness for discharges in 2021 through 2025.”
“If you had a student loan that was discharged after December 31, 2020, and the amount of the discharged loan is nontaxable, you won’t receive a Form 1099-C from the lender or servicer of your student loan.”
What this page does not cover
- The Instructions for Forms 1099-A and 1099-C (Rev. April 2025) and Form 1099-C do not mention Form 982. Form 982 and its instructions are the debtor-side documents quoted above.
- The Instructions for Forms 1099-A and 1099-C (Rev. April 2025) do not say where a debtor reports canceled debt on a return; the debtor’s copy of the form and Publication 4681 do. The instructions’ paragraph on changes says the qualified principal residence indebtedness exclusion “expires on December 31, 2025”, and the home mortgage section above lists the other IRS documents on its years.
- Penalty amounts and state filing rules are not covered. The instructions send readers to part O of the General Instructions for Certain Information Returns for penalties.
- Form 1099-A, the companion form for foreclosures and abandonments, is not described here.
Frequently asked questions
When does a creditor file Form 1099-C?
The IRS instructions (Rev. April 2025) have a creditor file Form 1099-C for each debtor for whom it canceled a debt owed to it of $600 or more if the creditor is an entity described under Who Must File and an identifiable event has occurred. The IRS About Form 1099-C page says: “File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if: You are an applicable financial entity. An identifiable event has occurred.”
What do the box 6 codes A to H mean?
The form’s recipient copy and Publication 4681 name the codes this way: A, Bankruptcy; B, Other judicial debt relief; C, Statute of limitations or expiration of deficiency period; D, Foreclosure election; E, Debt relief from probate or similar proceeding; F, By agreement; G, Decision or policy to discontinue collection; H, Other actual discharge before identifiable event. The Instructions for Forms 1099-A and 1099-C (Rev. April 2025) describe each event under When Is a Debt Canceled?
Does a debt under $600 mean no Form 1099-C and no income?
The $600 figure is the creditor’s filing amount in the instructions. The debtor’s copy says: “If a creditor has discharged a debt you owed, you are required to include the discharged amount in your income, even if it is less than $600, on the “Other income” line of your Form 1040 or 1040-SR.” It adds: “However, you may not have to include all of the canceled debt in your income.” Publication 4681 says that even without a Form 1099-C a canceled debt is gross income unless an exception or exclusion applies.
Which exclusions does the IRS describe for canceled debt?
Publication 4681 (2025) describes exclusions for bankruptcy, insolvency, qualified farm indebtedness, qualified real property business indebtedness and qualified principal residence indebtedness. Form 982 reports them on lines 1a to 1e, and Publication 4681 says that in most cases an excluded debt also reduces tax attributes.
Until what date does the IRS say the home mortgage exclusion applies?
Three IRS documents give the years in different words. Publication 4681 (2025), dated November 19, 2025, says qualified principal residence indebtedness “can be excluded from income for discharges before January 1, 2026”, and the front of the same publication says it cannot be excluded “from income for discharges completed or discharge agreements entered into after December 31, 2025”. The Instructions for Form 982 (Rev. December 2021) say “discharges subject to an arrangement that was entered into and evidenced in writing before January 1, 2026”. The 2026 draft of Publication 4681, dated August 5, 2026 and marked DRAFT—NOT FOR FILING, says a discharge in 2026 can still be excluded if the discharge arrangement was entered into and evidenced in writing before 2026. IRS.gov is the authority.
When are Form 1099-C copies due?
Publication 1099 (2026) lists January 31 for the debtor’s copy and February 28 for the IRS, with a footnote that the IRS date is March 31 if filed electronically. The instructions add that the form is filed in the year following the calendar year in which the identifiable event occurs, and Publication 1099 gives a next business day rule for weekends and legal holidays.
Who has to file Form 1099-C?
The instructions list six kinds of filers under Who Must File: financial institutions described in section 581 or 591(a), credit unions, the FDIC, NCUA and other listed federal bodies with their successors and subunits, certain subsidiaries of financial institutions or credit unions, federal government agencies, and any organization whose significant trade or business is the lending of money.
Is a Form 1099-C filed when a debt was fraudulent because of identity theft?
The instructions say: “Do not file Form 1099-C when fraudulent debt is canceled due to identity theft.” They add that the form is to be used only for cancellations of debts for which the debtor actually incurred the underlying debt.
Related IRS form pages and calculators
Sources (checked November 2, 2026): IRS: About Form 1099-C, Cancellation of Debt · IRS: Form 1099-C (Rev. April 2025), PDF · IRS: Instructions for Forms 1099-A and 1099-C (Rev. April 2025), PDF · IRS: Publication 4681 (2025), Canceled Debts, Foreclosures, Repossessions, and Abandonments, PDF · IRS: 2026 Publication 4681, draft (not for filing), PDF · IRS: Form 982 (Rev. March 2018), PDF · IRS: Instructions for Form 982 (Rev. December 2021), PDF · IRS: Publication 1099, General Instructions for Certain Information Returns (2026), PDF