Updated October 19, 2026. Quick answer: Boxes 1, 2, 3 and 5 of Form 1099-PATR show what a cooperative paid or allocated to you as a patron during the year. The form’s own instructions say that, generally, an individual reports these amounts as ordinary income, unless nontaxable, on the income tax return. Redemptions shown in boxes 2 and 5 carry a specific reporting rule that is quoted below.
What boxes 1, 2, 3 and 5 report
Form 1099-PATR is titled Taxable Distributions Received From Cooperatives. The recipient instructions open with a broad statement: “Distributions you received from a cooperative may be includible in your income.” Four of the boxes then describe the money and property that came to you. The box-by-box wording is set out in the table in the next section, and the whole form is walked through in the Form 1099-PATR boxes guide.
The four boxes in the recipient’s words
Each row below is the form’s own description of the box.
| Box | What the recipient instructions say |
|---|---|
| Box 1, patronage dividends | “Shows patronage dividends paid to you during the year in cash, qualified written notices of allocation (at stated dollar value), or other property (not including nonqualified allocations).” |
| Box 2, nonpatronage distributions | “Shows nonpatronage distributions paid to you during the year in cash, qualified written notices of allocation, or other property” |
| Box 3, per-unit retain allocations | “Shows patronage perunit retain allocations paid to you during the year in cash, qualified perunit retain certificates, or other property.” |
| Box 5, redeemed nonqualified notices | “Shows amounts you received when you redeemed nonqualified written notices of allocation and nonqualified perunit retain allocations from patronage sources.” |
Read the rows side by side and notice how often the words qualified and nonqualified appear. The form separates amounts paid in cash, notices and certificates that the form calls qualified, and redemptions of ones it calls nonqualified. Box 1 leaves out nonqualified allocations, which is why the redemption of a nonqualified notice is reported in a different box.
The box 1 rule for property
Box 1 carries an extra sentence about property you bought or used in a business: “Any dividends paid on (1) property bought for personal use or (2) capital assets or depreciable property used in your business are not taxable.” The same passage continues: “However, if (2) applies, reduce the basis of the assets by this amount.”
Those two sentences are the whole rule on the form. If your box 1 amount is tied to something you bought for personal use, or to equipment you use in a business, read the passage again before you decide how much is income.
Boxes 2 and 5 and redemptions
The instructions give a single sentence that covers the redemptions in both boxes: “You must report any redemptions in boxes 2 and 5 as ordinary income to the extent of the stated dollar value because they were not taxable when issued to you.”
Box 2 also reaches redemptions. Its description adds “and amounts you received in redemption of nonqualified written notices of allocation from nonpatronage sources.” Box 5 is the patronage-source counterpart, covering redeemed nonqualified written notices and redeemed nonqualified per-unit retain allocations. In plain terms, a notice you were given earlier that was not taxable at that time shows up in these boxes when the cooperative redeems it.
What the payer’s instructions say about each box
The cooperative fills in the form from its own instructions, which are written for the payer. For box 1 the payer is told to enter the patron’s share of the patronage dividends, using the words “qualified written notices of allocation (face amount), and other property (except nonqualified written notices of allocation)”. For box 2 the instructions begin with “For farmers’ cooperatives exempt from tax under section 521 only”, and they add that “Redemptions of nonqualified written notices of allocation that were paid on a patronage basis with respect to the cooperative’s earnings from nonpatronage sources” are also included in box 2.
For box 3 the payer’s instructions use the same pattern of cash, qualified certificates and other property, and for box 5 they say to “Enter the amount of redeemed nonqualified written notices of allocation that were paid as a patronage dividend”. In everyday terms, the payer is sorting what it paid you into four buckets, and the box tells you which bucket each amount came from.
Dividends on stock are a different form
Not every payment from a cooperative lands on this form. The payer’s instructions say “Report dividends paid on a cooperative’s capital stock on Form 1099-DIV, Dividends and Distributions.” If you also received that form, the layout of its boxes is covered in the Form 1099-DIV, 1099-INT and 1099-B guide. Other payments that arrive on information returns, such as the ones in the Form 1099-NEC and 1099-MISC guide, are separate again.
Where it goes on the return
The recipient instructions are short on this point and worth reading closely: “Generally, if you are an individual, report any amounts shown in boxes 1, 2, 3, and 5 as ordinary income, unless nontaxable, on your income tax return.” Neither the recipient copy nor the payer’s instructions name a line of the return. The general layout of the return is on the Form 1040 page, and tax software or a preparer will ask for the figures box by box.
Boxes 4 and 6 to 13 are different kinds of entries: Form 1099-PATR box 4 covers tax already withheld, Form 1099-PATR boxes 6 to 9 covers the section 199A information, and Form 1099-PATR boxes 10 to 13 covers the credits.
Edition and box numbers
This page reads Form 1099-PATR (Rev. April 2025), the recipient copy with its instructions, together with the payer’s Instructions for Form 1099-PATR (Rev. April 2025). The payer’s instructions say “Use these instructions for tax year 2025 and subsequent years until a superseding revision is issued.” Even so, check the year and edition printed on the form you received, because box numbers can change between editions. The recipient copy also points to a place for later changes: “For the latest information about developments related to Form 1099-PATR and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form1099PATR.”
Common mistakes
- Skipping the redemption rule. The form says “You must report any redemptions in boxes 2 and 5 as ordinary income to the extent of the stated dollar value because they were not taxable when issued to you.”
- Treating every box 1 dollar as income without reading the property sentence. The form says “Any dividends paid on (1) property bought for personal use or (2) capital assets or depreciable property used in your business are not taxable.”
- Looking for stock dividends on this form. The payer’s instructions say “Report dividends paid on a cooperative’s capital stock on Form 1099-DIV, Dividends and Distributions.”
Related: the Form 1099-DIV, 1099-INT and 1099-B guide, the Form 1099-NEC and 1099-MISC guide, and Form 1040.
Sources
- Form 1099-PATR, Taxable Distributions Received From Cooperatives (Rev. 2025), with Instructions for Recipient: https://www.irs.gov/pub/irs-pdf/f1099ptr.pdf
- Instructions for Form 1099-PATR: https://www.irs.gov/pub/irs-pdf/i1099ptr.pdf
- IRS: About Form 1099-PATR: https://www.irs.gov/forms-pubs/about-form-1099-patr
Read from the IRS documents linked above on October 19, 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.