Instructions For Form 1099-Patr - 2016 Page 2
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2Box 4. Federal Income Tax Withheld
without taking into account any deduction allowable under
section 1382(b) or (c) relating to patronage dividends, per-unit
Enter backup withholding. For example, persons who have not
retain allocations, and nonpatronage distributions. In the case of
furnished their TIN to you in the manner required are subject to
a cooperative engaged in the marketing of agricultural or
withholding at a 28% rate on payments required to be reported in
horticultural products (or both), the cooperative is treated as
boxes 1, 2, 3, and 5 to the extent such payments are in cash or
having manufactured, produced, grown, or extracted in whole or
qualified check. See Regulations section 31.3406(b)(2)-5 for
in significant part any qualifying production property marketed by
more information on backup withholding by cooperatives.
the cooperative that its patrons have manufactured, produced,
grown, or extracted. Agricultural or horticultural products also
Box 5. Redemption of Nonqualified
include fertilizer, diesel fuel, and other supplies used in
Notices and Retain Allocations
agricultural or horticultural production that are manufactured,
For farmers' cooperatives qualifying under section 521 only,
produced, grown, or extracted by the cooperative.
enter all redemptions of nonqualified written notices of allocation
Don't reduce the amounts reported in boxes 1 or 3 by
issued as patronage dividends or nonqualified written notices of
the amount you report in box 6.
!
allocation issued as nonpatronage allocations. Also enter
nonqualified per-unit retain certificates issued with respect to
CAUTION
marketing.
Written notice. In order for the patron to qualify for the
deduction, the cooperative must designate the patron's portion
Pass-Through Credits and Deductions
of the section 199 deduction in a written notice mailed to the
patron no later than the 15th day of the ninth month following the
Report in the appropriate boxes the patron's share of unused
close of the tax year. The cooperative may use the same written
credits and deductions that the cooperative is passing through to
notice, if any, that it uses to notify patrons of their respective
the patron.
allocations of patronage dividends, or may use a separate timely
Box 6. Domestic Production
written notice to comply with the written notice requirement for
this deduction.
Activities Deduction
Box 7. Investment Credit
A cooperative must reduce its section 1382 deduction
by an amount equal to the portion of any patronage
!
Enter the total investment credit for the patron.
dividend or per-unit retain allocation, including any
CAUTION
Box 8. Work Opportunity Credit
advances on these paid in cash during the year, that is
attributable to the cooperative's section 199 deduction passed
Enter the total work opportunity credit for the patron.
through to its patrons during the year. See Regulations section
1.199-6 for more details.
Box 9. Patron's AMT Adjustment
Enter the total alternative minimum tax (AMT) patronage
Deduction for domestic production activities income.
dividend adjustment for the patron.
Section 199(d)(3) and Regulations section 1.199-6 provide
special rules for cooperatives to pass through, if elected, to their
Box 10. Other Credits and Deductions
patrons receiving certain patronage dividends or certain per-unit
retain allocations from the cooperative a deduction equal to their
For the patron, state separately in box 10 the type and amount of
portion of the cooperative's qualified production activities income
each of the following credits and deductions.
(QPAI) that would be deductible by the cooperative and have
The cellulosic biofuel fuels credit (including second
been designated by the cooperative in a written notice mailed to
generation biofuel) (Form 6478).
its patrons during the payment period specified under section
The renewable electricity, refined coal, and Indian coal
1382(d). The deduction for QPAI applies to any cooperative that
production credit (Form 8835).
is engaged in the manufacturing, producing, growing, or
The empowerment zone credit (Form 8844).
extracting in whole or significant part of any agricultural or
The Indian employment credit (Form 8845).
horticultural product, or the marketing of agricultural or
The biodiesel and renewable diesel fuels credit (Form 8864).
horticultural products.
The low sulfur diesel fuel production credit (Form 8896).
If any amount of a patronage dividend or qualified per-unit
The credit for small employer health insurance premiums
retain allocation is passed through to a patron, and such amount
(Form 8941).
is allocable to QPAI that is deductible under section 199(a), then
The credit for employer differential wage payments (Form
the amount is reported in box 6. However, if no written notice
8932).
(see later) was sent within the payment period or if the
The deduction for capital costs incurred by small refiner
cooperative does not pass through the deduction to the patron,
cooperatives when complying with EPA sulfur regulations.
leave box 6 blank.
To determine the portion of the cooperative's QPAI that would
be deductible, the cooperative's taxable income is computed
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Instructions for Form 1099-PATR (2016)
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