Berkeley is not issuing 1099’s because it has concluded that the benefit is excluded as a refinancing loan that is discharged under § 108(f)(1) of the Internal Revenue Code. Consequently the Disbursement’s Office is not reporting LRAP payments to the IRS.
Please consult a tax accountant or tax attorney for advice on the taxability of LRAP.
”Form 1099 series is used to report various types of income other than wages, salaries, and tips (for which Form W-2 is used instead). Examples of reportable transactions are amounts paid to a non-corporate independent contractor for services (in IRS terminology, such payments are nonemployee compensation).”