2022 Update on Form 1099 and 1042-S Reporting of Payments for Software and Digital Content | Product

Payments for software, digital content and cloud transactions are among the most challenging types of payments to correctly analyze for IRS Form 1099 or 1042-S reporting compliance.  Should a payment be characterized as a royalty, a rental, a goods purchase or a service?  How are these types of income to be “sourced” either within or outside of the United States?  This presentation will bring you up to date with the most recent official IRS guidance and instructions.

• How the tax regulations interact with definitions from copyright law
• Tax regulations which classify transactions involving computer programs
• How proposed regulations, REG-130700-14, answer some important questions – but not all
• How these various tax treatments are reported to the IRS on Form 1099-MISC, Form 1099-NEC and Form 1042-S

Learning Objective:

• Analyze payment transactions to correctly determine whether to treat them as rentals, royalties, services, or nonreportable payments for merchandise