Why Customers Receive a 1099-DIV for MDP
Did you receive a 1099-DIV Form in the mail this tax season? Let’s talk about why.
In 2018, GVTC introduced the Member Dividend Program (MDP) to show our appreciation and commitment to active members. It was a big initiative that we believe our customers deserve and will benefit from for many years. In response to inquiries about recent IRS Form 1099-DIVs sent out in January, we want to explain this program and help resolve any confusion customers may have.
Member Dividend Program
GVTC introduced the Member Dividend Program for interested members. As a participant in this program, you receive a dividend on your monthly bill, reducing your payments by 20%. Funding for this program comes from other operational parts of GVTC’s business that have seen great success and have made this possible.
Because GVTC values its members, it was decided to pass those funds along to you. The GVTC Board of Directors unanimously voted in favor of this new program, which is now running steady for its third-year. However, funding this program required certain regulations per the IRS.
IRS Regulations of Dividends
In order to transfer funds from one part of GVTC’s business to another, the distribution must be done in the form of dividends per IRS regulations. Those dividends are thus taxable by the IRS, requiring GVTC to send our members who opt into the program a 1099-DIV Form. Be sure to keep an eye out for letters in the mail or official GVTC emails that may contain important information regarding your member dividend.
How to Qualify for MDP
Members that do not provide a valid SSN or EIN to GVTC are automatically ineligible for the program to ensure compliance with IRS Form 1099-DIV issuance rules.All active members of the Cooperative with a valid Social Security Number (SSN) or Employer Identification Number (EIN) on their GVTC account are eligible for the Member Dividend.
To learn more about this program, visit our Member Dividend Program FAQS.