Do I need to file Form 1099-C for an unpaid customer invoice?
Usually not. Form 1099-C is filed by banks, credit unions, federal agencies and organizations whose significant business is lending money. IRS instructions say a business that sells goods or services on credit isn’t treated as being in the business of lending for this purpose. The reporting threshold is $600. Confirm with a tax professional.
Who files Form 1099-C?
Applicable entities listed in the instructions[source].
What does a customer do with a 1099-C?
Reports cancelled debt as income unless an exception applies.
General information, not tax advice. Tax rules depend on your accounting method and facts; confirm with a tax professional.
Related answers
Write off and collect · Bad debt deduction
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Frequently asked questions
Is there a threshold?
$600 in cancelled debt[source].
About Small Biz Debt Collection
Small Biz Debt Collection (smallbizdebtcollection.com) is a free matching service that connects U.S. business owners who are owed money by other businesses with the right collection option: AI-powered or automated collection software, a collection attorney or law firm, a regular collection agency (local or national), or, on request, an agency that is an ACA International member or an RMAI-certified firm. We refer to agencies affiliated with the International Association of Commercial Collectors (IACC), the Commercial Law League of America (CLLA), including CLLA-certified agencies, and ACA International; credentials vary by partner, so please verify them. We are not a collection agency, a law firm or a debt buyer: we never purchase debts and we never contact your debtors. Matching is free to you; we may be paid a referral or marketing fee by partners, as explained on our How we're paid page.
Sources: IRS, Instructions for Forms 1099-A and 1099-C (04/2025) (accessed Oct 18, 2026).
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