There are some changes that are happening that we need to talk about today. The first change has already taken place. It has to do with the IRS forms 1099-G and 1099- Misc for Calendar year 2012. In past years, IRS Forms 1099-G were issued to show all program payments received from the Farm Service Agency, regardless of the amount. For calendar year 2012, the 1099-G reporting will change.
IRS Form 1099-G (Report of Payments to Producers) will only be issued to producers whose reportable payments total $600 or more for the calendar year. Additionally, if the producer has at least $600 in reportable payments received from multiple FSA offices, only one Form 1099-G will be issued. Producers subject to voluntary withholding or backup (involuntary) withholding will receive the appropriate IRS form, even if combined payments are less than $600. The same changes will apply to producers and vendors who normally receive IRS Form 1099-MISC from FSA.
Any producer who receives less than $600 in combined payments should consult a tax advisor to determine if these payments must be reported on their tax return.
The next change will be taking place in the near future. FSA/CCC is moving toward OTCnet, an electronic method for processing customer check payments. When a check is submitted for payment either in person or through the mail, the check will be converted into an Electronic Funds Transfer (EFT). The funds will be debited from the producer’s account, usually within 24 hours of receipt. Below are some questions you may be asking yourself and the answers.
What is OTCnet? OTCnet is a Web-based online application process for converting paper checks presented to FSA into electronic debits to the producer’s bank account. It presents many benefits, such as reducing lost/misplaced checks and paper handling. This improves customer relations, speeds the check clearing process, and reduces the potential for human error.
How will my check be handled? The check will be scanned into the system and voided. The customer will not receive the check back from FSA. FSA will hold checks for up to 14 calendar days to ensure that the item was successfully processed, and then FSA will shred the check.
How quickly will funds be transferred from my account? The transfer of funds from your account could occur within 24 hours. Therefore, you should be sure that you have sufficient funds in your account to process the transaction. If you do not have sufficient funds, we may initiate the transaction again.
How will this transaction appear on my account statement? The transfer of funds will be reflected on your account statement. The transaction may be recorded in a different place on your statement than where your checks normally appear, such as under “other withdrawals” or “other transactions.”
That’s all for now,