Form 1097-BTC, the Bond Tax Credit form, has specific reporting requirements to ensure that bondholders and the IRS accurately track tax credit bond credits, particularly for bonds like Build America Bonds and Qualified Zone Academy Bonds. Here’s an overview of these requirements:
1. Quarterly Filing Requirements:
- Due Dates: Form 1097-BTC must be filed quarterly. The deadlines generally align with typical quarterly reporting periods, usually by the end of the month following the end of each quarter:
- First Quarter: April 30
- Second Quarter: July 31
- Third Quarter: October 31
- Fourth Quarter: January 31 of the following year.
- Purpose: Quarterly filings allow the IRS and bondholders to account for tax credits as they are allocated throughout the year, ensuring accurate and timely tracking for tax purposes.
2. Annual Summary Requirement:
- End-of-Year Summary: In addition to the quarterly filings, an annual Form 1097-BTC summary is required at the end of the tax year. This annual report consolidates the total bond tax credits reported throughout the year.
- Reconciliation: This final annual filing reconciles the quarterly reports and provides a complete picture of the total tax credits allocated to each bondholder for the year. This summary is essential for the bondholder’s final tax return preparation and for IRS verification purposes.
3. Information Required on the Form:
- Taxpayer and Bond Information: Each Form 1097-BTC includes details such as the taxpayer’s name, Taxpayer Identification Number (TIN), the type of bond, and credit amounts. Each quarterly filing reports only the credits earned for that specific period.
- Aggregate Credit Totals: The annual filing aggregates these amounts, helping ensure that total credits align with individual quarterly entries.
4. Who Must File:
- Bond Issuers: The issuers or trustees of tax credit bonds, not the bondholders themselves, are responsible for filing Form 1097-BTC with the IRS and providing copies to bondholders. This ensures that all tax credits are properly documented and reported to both the IRS and the individuals claiming the credits.
These reporting requirements maintain an accurate system for monitoring tax credit allocations for tax compliance and help bondholders correctly report credits on their tax returns.
