The National Association of College and University Business Officers is warning its members that if their schools enable students to make purchases at off-campus merchants they’ll probably have to file a new IRS form for 2011.
The form is 1099-K, the Merchant Card and Third Party Network Payments form, NACUBO points out it “will be used to report payments to unrelated entities in settlement of payment transactions.”
This new reporting obligation was mandated by the Housing Assistance Tax Act of 2008 and is intended to ensure that businesses accurately report their income from such transactions.
For example, if deposits are made to the card by the card holder, if the card is accepted by one or more merchants not related to the institution, or if the institution is obligated to pay participating merchants in settlement of transactions with cardholders, than the school will likely have to file a 1099-K.
However, if a campus card program is outsourced to a bank or other third party, that entity, assuming it actually makes the payments to the merchants, would be the one required to file the form.
Read more about the new IRS reporting requirements at the NACUBO Web site here.