Do we report payments to auto body shops if they are made to the insured/claimant and the body shop?

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The answer to your question depends on the nature of the payment. We spoke with IRS Information Ms. Pickney (#69891) who indicated several reportable or non-reportable situations.

  • If the payment to the body shop is for compensation for fixing the automobile then it would be reportable in box 7 on form 1099-MISC for the repair parts.
  • If the payment is a reimbursement to the insured who is being made whole (i.e., the insured is getting reimbursed for their payment to the body shop directly and the insurance company is merely cutting a check to reimburse) then it is likely not a reportable event.
  • If the payment is to the insured for compensatory damages such as punitive damages for lost days of work then it would be reportable in box 3 in form 1099-MISC.

However, we recommend that you reach out directly to the IRS at 866-455-7438 and provide them your specific situation since there are different variables in a payment that can change character of whether or not it's a reportable payment.

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