Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer
1/11/2018

CUAD’s New Compliance Webpage. Last week, we discussed the dues supported resources available to all of CUAD affiliated credit unions. As announced earlier this week, our website has a new look, and it is now easier than ever to access those resources and your compliance tools here. I encourage you to take a minute to explore today. We are confident you will find it vastly improved.

Under the “Compliance” tab (just scroll above) you will quickly find my contact information. Remember, all CUAD affiliated credit unions can submit an unlimited number of compliance/regulatory questions by email or phone. In case you miss reading the Memo some Thursday, you can find past compliance related Memo articles under “Compliance Updates.” Links to InfoSight and CU Policy Pro are front and center under the new Compliance page. If you have never explored your CU Policy Pro manual or InfoSight and have questions, contact me for a free one-on-one introduction.  
 

IRS Reminder. W-2s need to be given to employees by January 31, 2018. Forms W-2 and W-3 are due on January 31, 2018 to the Social Security Administration. Forms 1099 MISC with an amount listed in Box 7 (non-employee compensation) are due to the independent contractor AND THE IRS by January 31, 2018.

For more information, here is a helpful video from the IRS:

W-2s, W-3s, 1099-MISC, Information Returns Due Date: January 31

Here is some additional guidance from the IRS on these topics:

Filing Forms 1099-MISC with NEC in Box 7 with the IRS

Am I required to file Form 1099 for payments to sub-contractors or vendors?
 

InfoSight Highlight. IRS Form 1098. Credit unions (i.e., "interest recipients"/lenders) who receive mortgage interest payments of $600 or more during a calendar year, must report those interest payments to both the member (i.e., payer of record making those payments) and to the IRS on "Form 1098, Mortgage Interest Statement.”

In 1994, the IRS issued a final regulation on reporting prepaid interest in the form of points paid on residential mortgages. Although this regulation took effect December 8, 1994, the reporting requirements do not apply to points received before January 1, 1995.

The IRS compares the 1098 provided by the credit union with the mortgage interest payments claimed as deductions on the member's income tax return.

What is a mortgage?

For purposes of this reporting requirement, a mortgage is defined as an obligation (e.g., a loan) secured (all or in part) by real property. It is the credit union's responsibility, as the interest recipient, to make the determination as to what a mortgage is. Note that real property includes a manufactured home, including certain mobile homes.

How do multiple mortgages affect credit unions?

The credit union must file a separate 1098 for each mortgage on which it received interest of $600 or more during a calendar year. If the credit union receives less than $600 of interest on a mortgage then no reporting is required.

What are mortgage interest payments?

According to Form 1098, the term mortgage interest includes "interest on any obligation secured by real property, including a home equity, line of credit, or credit card loan."

Click here to view the topic, and to ensure your credit union is in compliance.

 

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