Lightning 1099 Module

The Lightning 1099 module is an integrated module that works in conjunction with Lightning TradeDesk, and the Lightning RTS Bond Trading, Funding, and Safekeeping/ Custody modules to report fixed-income transaction and payment activity per IRS regulations. For eligible customers, the Lightning 1099 module can report the following:

  1. 1099-B for each sale transaction, maturity or called bond, and early redemption.
  2. 1099-INT for coupon interest, interest at maturity, early redemption interest, interest on short-term OIDs, interest on bearer CD's, accrued interest on sold items between payment dates, interest of principal forfeited due to early withdrawal, interest on US Treasury Bills, notes, and bonds. Taxable security, exempt security interest and alternative minimum tax interest is reported.
  3. 1099-OID for each maturity or called bond or early redemption sale, on-hand receipts including long term OID appreciation, coupon interest on long term OID obligations, and amount of interest or principal forfeited due to an early withdrawal.
  4. 1099-DIV for gross dividends, ordinary dividends and capital gains distribution.

The Lightning 1099 process starts by identifying your customers who are eligible or exempt from 1099 reporting. Eligible 1099 customers are setup for information reporting (1099-B) or interest reporting (1099-INT, OID, DIV) or both.

For each Lightning RTS module (Trading, Funding, and/or Safekeeping), Lightning will pull transaction information from the module's historical file for the reportable year. Items that are being reported appear on 1099 accumulation audit trails. Each audit trail provides detailed information for each transaction being reported grouped by customer. Lightning provides error checking at the customer level in the form of identifying customers with invalid or missing TIN information and at the transaction level by alerting when OID calculations are missing transaction data necessary to calculate the reportable OID amount. The Lightning accumulation audit trails recognize exempt interest items being reported and displays this separately from the taxable interest being reported allowing for easier accumulation review.

Since the Lightning 1099 module is integrated with other Lightning applications, checking what is displayed on the 1099 accumulation audit trails is simple. Lightning TradeDesk blotters and customer activity screens allow you to slice and dice information looking only for coupon payments or maturities or buy trades for individual customers. Reconciling the information displayed in TradeDesk to the accumulation audit trails becomes a very quick task.

The Lightning 1099 module allows you to choose either the appropriate IRS forms or 1099 substitute statements to satisfy the regulatory requirement of customer notification of what will be reported. If corrections are necessary, the 1099 module provides the capability to add, maintain or delete reportable transactions prior to submitting files to the IRS. When it is time to transmit your reportable information to the IRS, Lightning creates 1099 files in the formats required by the IRS for e-filing. Following e-filing, if it would become necessary to report any correction, the Lightning 1099 module contains a complete correction process based on IRS requirements.

From identifying customers who must report 1099s to the e-filing of reportable information, the Lightning 1099 module is your total solution for reporting of 1099-B, 1099-INT, 1099-OID, and 1099-DIVs for fixed-income products.