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Eligibility Determination

Once data has been ingested, an active job will be automatically triggered for our platform to identify the population of accounts that are eligible for each form type (e.g., IRS Form 1099, MRDP, CESOP, etc.). The analysis performed depends on the relevant tax deliverable, but in general, it involves a review of both Account Owner data, as well as any Transactions and/or Form Data.

For each account, Taxbit will also determine whether sufficient information is available on the Account Owner to complete reporting – this is referred to as Account Validation.

For data being sent via API, eligibility calculations will run nightly and be available the next day.

Please note: Our platform offers functionality to either add or remove an account from scope, providing you with more flexibility and the ability to only proceed with form generation for the exact population of accounts you would like. For more information, please refer to the following guide: How to Add and Remove from Scope

 

Eligibility Criteria

In general, an Account will be considered eligible to the extent that the following criteria are met:

  • Information on file indicates that the Account Owner is a tax resident in the relevant jurisdiction (e.g., US for Forms 1099)
  • Transaction or Form Data meets the relevant threshold. Note that if both Transaction and Form data are provided, only the Form Data will be considered.

Account Owner Data

The Taxbit platform uses Account Owner tax residency information to help determine whether the Account Owner is eligible for reporting based on the specific form type selected (e.g., US Person eligible for 1099 reporting).

This determination is based on either:

  • Tax residency information on the Account Owner record, such as the tax country.

  • Tax documentation provided, such as a W-9 (US Person), W-8 (Non-US Person), or Self-Certification Form.

    • If no tax document is on file, Taxbit may still use other Account Owner information in the Reporting Profile, including tax residency information, to help determine the tax residency country for an Account Owner for purposes of determining eligibility. 

Transaction and/or Form Data

In addition to the Account Owner data, the Taxbit system will also review the transaction and/or Form Data provided to determine if the activity meets the applicable threshold for reporting. For more details on the specific threshold for each form type, please review our tax form overview guides: Tax Form Overviews