Updated October 16, 2026. Quick answer: Box 8 of Form 1099-MISC shows payments your broker received in place of a dividend or tax-exempt interest after your securities were loaned out. It is numbered box 8 on both the December 2026 and the 2025 forms. The recipient instructions say to report it on the Other income line of Schedule 1 (Form 1040).
What box 8 reports
The recipient instruction defines the box: “Shows substitute payments in lieu of dividends or tax-exempt interest received by your broker on your behalf as a result of a loan of your securities.” On the form the label is “Substitute payments in lieu of dividends or interest”. In plain terms, your broker lent your shares, and the payment it received in place of the dividend or interest is what the box shows. The full form is mapped in the Form 1099-MISC overview and the 1099-NEC and 1099-MISC boxes overview.
Where box 8 goes on Form 1040
“Report on the “Other income” line of Schedule 1 (Form 1040).” A real dividend reported by a fund or company appears on Form 1099-DIV, which is explained on the 1099-DIV box 1a and 1b page. Box 8 is a separate form and a separate instruction.
Tax-exempt interest has its own box on Form 1099-INT, explained on the 1099-INT box 8 page. Whether the replaced payment was a dividend or tax-exempt interest, the box 8 instruction sends the substitute payment to the Schedule 1 line quoted above.
What counts as a substitute payment
The payer instructions are exact about the words. “Substitute payment means a payment in lieu of:” “A dividend, or” “Tax-exempt interest to the extent that interest (including original issue discount) has accrued while the securities were on a loan.”
The instruction is aimed at the broker. “Enter aggregate payments of at least $10 of substitute payments received by a broker for a customer in lieu of dividends or tax-exempt interest as a result of a loan of a customer’s securities.” The “aggregate” amount is the total for the year, so several small substitute payments can add up to a reported figure.
Who counts as the customer
The customer is not only a person with a brokerage account. “For this purpose, a customer includes an individual, trust, estate, partnership, association, company, or corporation.” The instruction excludes some customers: “It does not include a tax-exempt organization, the United States, any state, the District of Columbia, a U.S. territory, or a foreign government.”
The instructions also list this box among payments to corporations that are generally reportable. “Substitute payments in lieu of dividends or tax-exempt interest reported in box 8.” So a corporation that lent securities through a broker can also hold a box 8.
Related boxes on the same form
The payer is told which copy goes where. “File Form 1099-MISC with the IRS and furnish a copy to the customer for whom you received the substitute payment.”
Box 4 can carry backup withholding on these payments, since the payer rule lists box 8 among the boxes where it applies. “Report this amount on your income tax return as tax withheld.” The broader rules for withheld tax are covered on the 1099-DIV box 4 page.
Checking the form against your brokerage statements
The recipient copy carries a field for matching the form to an account. “May show an account or other unique number the payer assigned to distinguish your account.” If you hold securities at more than one broker, the account number tells you which broker’s loan program produced the substitute payment. The broker’s year-end statement is the place to confirm the amount.
The recipient instructions add a general caution for every box: “Amounts shown may be subject to self-employment (SE) tax.” That sentence sits at the top of the recipient instructions for the whole form. For box 8, the instruction that follows it sends the amount to Schedule 1, so the Schedule SE reference is a question to settle with the Instructions for Schedule SE, which the form names, and not something this page decides.
For the return that receives the Schedule 1 total, see the Form 1040 page. A year with large gains or losses on the lent securities themselves is covered on the Schedule D page, which is a separate calculation from box 8.
If the form does not fit
If a form does not fit your facts, the recipient instructions give a path: “If this form is incorrect or has been issued in error, contact the payer.” “If you cannot get this form corrected, attach an explanation to your tax return and report your information correctly.”
Edition and box numbers
The December 2026 revision of the Form 1099-MISC recipient copy and of the Instructions for Forms 1099-MISC and 1099-NEC was the primary read for this page. The April 2025 instructions and the 2025 recipient copy were read beside it, and irs.gov served both editions on 2026-10-16. Box 8 keeps its number and its description on both forms, and the payer threshold is the same on both. The differences between the two editions are elsewhere on the form, for example in the numbering after box 12. Check the revision printed on the form you received, because a box number or a payer threshold can differ between editions.
Common mistakes
- Reporting a box 8 amount with the dividends from Form 1099-DIV. The recipient instruction for box 8 is to report on the Other income line of Schedule 1 (Form 1040).
- Assuming a replacement for tax-exempt interest is reported as tax-exempt interest. The box 8 instruction sends substitute payments in lieu of dividends or tax-exempt interest to the same Schedule 1 line.
- Overlooking a box 8 form because the amounts were small. The payer instruction speaks of aggregate payments of at least $10, so several small substitute payments add together.
Related: Form 1099-MISC overview, 1099-DIV, 1099-INT and 1099-B boxes explained, 1099-DIV box 1a and 1b, 1099-INT box 8 tax-exempt interest, and 1099-DIV box 4 backup withholding.
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- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): https://www.irs.gov/pub/irs-pdf/i1099mec.pdf
- Form 1099-MISC, Miscellaneous Information (Rev. December 2026), recipient copy: https://www.irs.gov/pub/irs-pdf/f1099msc.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.