U.S. · Tax forms
1099-MISC box 8, substitute payments.
What a broker reports when your shares are lent out.
Box 8 of Form 1099-MISC reports aggregate payments of at least $10 of substitute payments that a broker received for a customer, in lieu of dividends or tax-exempt interest, as a result of a loan of the customer’s securities. You see it when your broker lent out shares you held in a margin or lending arrangement.
Check the dollar line
Result
What is a substitute payment
The instructions define it as a payment in lieu of a dividend, or in lieu of tax-exempt interest to the extent that interest (including original issue discount) accrued while the securities were on loan. When a broker lends a customer’s shares to a short seller, the borrower generally pays the lender an amount equivalent to the dividend instead. That equivalent is the substitute payment.
Who the broker reports for
A customer includes an individual, trust, estate, partnership, association, company or corporation. 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 broker files Form 1099-MISC with the IRS and furnishes a copy to the customer. The instructions point to Notice 2003-67 for the rules.
Backup withholding
Box 4 lists box 8 among the payments subject to backup withholding when a recipient has not furnished a taxpayer identification number. Any such withholding is reported in box 4.
What the instructions do not say
The 1099-MISC instructions only define the box and its filing line. How a substitute payment is taxed on your own return is not explained there, so use the payer’s statement and your preparer rather than this page for that question.
Worked example
A broker lends a customer’s shares and receives two substitute payments in lieu of dividends during the year, $4 and $7. The aggregate is $11, which is at least $10, so the broker reports $11 in box 8. If the total had been $9 the box 8 line would not have been met.
Related decoders
More 1099 box pages: 1099-K box 1a, gross amount of payments, 1099-K box 1b, card-not-present transactions, 1099-NEC box 1, nonemployee compensation, 1099-MISC box 14 and excess golden parachute payments, 1099-MISC box 2, royalties. For the 1099-R box 7 codes see the 1099-R distribution codes lookup.
Sources
- Instructions for Forms 1099-MISC and 1099-NEC (12/2026): the box-by-box section for this form. Read November 2, 2026. The IRS page was last reviewed July 1, 2026 and labels the instructions 12/2026.
Edition read: Instructions for Forms 1099-MISC and 1099-NEC (12/2026). The instructions say the $2,000 minimum threshold applies for tax years beginning after 2025 and may be adjusted for inflation beginning in calendar year 2027; check which year your own form covers. This page summarizes the instructions and does not replace them.
Frequently asked questions
What is box 8 on a 1099-MISC?
Box 8 reports aggregate payments of at least $10 of substitute payments a broker received for a customer in lieu of dividends or tax-exempt interest as a result of a loan of the customer’s securities.
Why did I get a 1099-MISC from my broker?
If your broker lent your securities and received substitute payments on your behalf totaling $10 or more, it reports them on Form 1099-MISC in box 8.
What is a substitute payment?
A payment in lieu of a dividend, or in lieu of tax-exempt interest to the extent that interest accrued while the securities were on loan.
Who is excluded as a customer?
Tax-exempt organizations, the United States, any state, the District of Columbia, a U.S. territory and foreign governments are not customers for this purpose.
Does backup withholding apply to box 8?
Yes. The box 4 instructions list box 8 among the boxes where persons who have not furnished their TINs are subject to withholding.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box means for your return. Everything runs in your browser; nothing you enter is sent anywhere.