How late could I receive a corrected 1099?

Question

(Background: in March 2020, I received a corrected 1099 for tax year 2019 from Robinhood.)

How late could a corporation like Robinhood file a corrected 1099 if they made an error? The 1099 I received for tax year 2020 is missing some options, though I might simply not be understanding how options are used in calculating taxes. I haven't filed my taxes yet, because I don't want to have to file an amended return if Robinhood were to send me a corrected 1099, so I am wondering how late I should wait to see if Robinhood sends me a corrected 1099 before filing my taxes.

Answer 1

If you have some securities like a BDC or a CEF or an MLP or a few of the other more exotic holding type companies, they formally have up to 3 years to choose to recharacterize payments out. I.e. they could change dividends from qualified to non-qualified, that new category of 199A dividends, or even change them to return-of-capital.

I am pretty sure that the statute of limitations on a tax return is 3 years or 6 years, depending on the nature of the error. So that would be the next time limit. I feel like if you made a good faith effort -- you filed correctly given the 1099 in your hand at the time -- the IRS is truly going to work with you to be equitable. But, if a gross accounting error occurred, new 1099s would need to be issued, and you would be responsible for making square with the new information, even if it is more than 6 years after the fact.

All that said, it seems to me that this could be resolved with just talking with someone at your broker that actually can verify that the form was calculated correctly...

Answer 2

The source of mistakes that trigger a corrected tax form are many.

At this point with only about two weeks to before the filing deadline you will soon have no choice. You will have to file trusting that the numbers are correct.

If you believe they are wrong, you should contact Robin-hood.