New in December: 1099-INT guide, dynamic ACH originator name and more
It’s the end of the year and this month we’re helping you prepare for a successful 2024. We’ve got a guide that will help you generate form 1099-INTs for your customers and updates to statements functionality that include breaking changes that must be addressed before February 2024.
We also made updates to our cards functionality and added a new originator_name field to the ACH object.
Looking for more updates? Check out the Changelog.
User guide - How to generate Form 1099-INT with statement endpoint
If your organization uses the Treasury Prime ledger and distributes interest to customers in collaboration with your bank partnership, it is mandatory to provide end users with 1099-INTs for the previous calendar year. Treasury Prime generates 1099-INTs; however there are some steps you need to take in order to ensure accuracy and distribution to your end users by the end of January.
To generate these forms accurately, please adhere to the following steps:
1. Categorize transactions as “interest” by January 10th, 2024
- Ensure all relevant transactions for 2023 are correctly categorized as “interest”. You can do this by setting the category field on the transaction object to interest.
- If transactions are not accurately categorized by January 10, 2024, corrections will be required and additional costs to your organization will be incurred.
2. Fetch the 1099s upon generation in January
- 1099-INT documents will be ready for distribution by the end of January for accounts that accrued over $10 in 2023. You can fetch the 1099s PDFs via the /statement endpoint.
- Keep in mind, only transactions labeled as 'Interest' (step 1) are included in the 1099 creation process, so it’s imperative to complete step 1 by the January 10th deadline.
3. Disburse to your end users
- In order to remain compliant 1099-INTs must be disbursed by January 31, 2024.
Other important things to note regarding 1099-INT generation:
Foreign Account Tax Compliance Act (FATCA):
- FATCA requires all foreign financial institutions to share information about accounts belonging to US citizens. More information can be found on the IRS website.
- Treasury Prime will default to indicating "False" for FATCA. Customers must proactively opt into FATCA for account holders by notifying Treasury Prime via email before January 10th, 2024.
- If you are unsure whether your end users need to opt into FATCA, consult a tax professional. Treasury Prime cannot advise on this matter.
- Ensure the addresses on your end users’ accounts are up to date by January 10th, 2024. For more information on addresses, please refer to our Account API Reference Page.
- If 1099-INT forms need to be corrected after they have been generated, an additional cost will be incurred by the customer. Common reasons for corrections include:
- ~Incorrectly reported interest amount
- ~Incorrect end-user address
- ~Incorrect FATCA information during the initial filing
Our work to improve our Statements functionality continues. This month we’re rolling out a slew of updates to help customers tailor their statements based on the guidance provided by their sponsor bank.
We’ve broken down these changes into two categories: tactical breaking changes and cosmetic changes.
Tactical breaking changes
These changes require action from your organization. These changes will affect the statement config for your organization, and you must ensure that the statement config is up to date before the breaking changes go into effect February 20th, 2024. All changes should be made in collaboration with your sponsor bank.
- You can now set the APY on the statement config. This parameter is currently optional, though it will become required on the statement config by February 20th 2024, as it is required to include on statements per Reg DD. We recommend you review these changes and update your statement config(s) as soon as possible. To learn more about the Statement Config, please visit our API reference page.
- Note, in the event of an APY change, you’ll have to update the statement config before the 1st of the month following the statement period. For example, if the APY is changing for the month of November 2023, you need to update the statement config prior to December 1, 2023.
Customize footnote language via API
- You can now add and customize the footnote language. We removed all hardcoded language from statements, including the required Reg E error disclosures. You will need to work with your partner bank to align on the specific language that should be included on your statements. This parameter is currently optional, though it will become required on the statement config by February 20th 2024 as you are required to include Reg E language on all statements.
- A template with sample Reg E customer complaint language can be found in our API docs for reference.
No longer generating “yearly summary” on statements
- We have removed the “yearly” summary from the statement config object, and will only generate monthly statements with monthly summaries from now on.
- The only annual form that will be generated is 1099-INTs, which are separate from monthly statements.
- Note, please review the linked page above to ensure you have taken the steps necessary to correctly generate 1099-INTs, as necessary for your organization.
No action is required from your organization. These changes will not break any configuration on your statement config.
Deposits & Withdrawals columns
- We have split the current “Amount” column into two separate columns: “Deposits” (money going into the account) and “Withdrawals” (money leaving the account). This will help specify the direction of funds movement more clearly.
Running Balance column
- A column was added titled “Balance” that reflects the balance of the account tied to each line item.
Minor copy edits
- The Description field in the Interest section is now labeled as "Interest Paid" instead of "Interest".
- Replaced "Starting Balance" with "Beginning Balance" in the Account Activity section.
Removed “N.A.” on bank footer from sample statements
- We removed the hard coded “N.A.” on sample statements. Instead, banks legal names, including “N.A.” if applicable, will be displayed.
Removed settrust and surplus transactions from sample statements
- Previously, these two types of transactions appeared in sample statements (not in production), which often led to confusion. We removed the “settrust” and “surplus” transactions from the sample statements.
Summarize and add aggregated fees to monthly statements
- We made a change to summarize aggregate fees in monthly statements. Previously, aggregate fees summary only appeared in yearly statements. This included: Beginning Balance, Deposits (credits), Interest Paid, Fees, and Ending Balance.
Aggregate Overdraft and Return Item fees
- We added specific line items for Aggregate Overdraft and Returned Item Fees.
We have made a few enhancements to our Cards feature.
Simulate requests to credit funds for OCT transactions
We’re pleased to roll out this functionality in sandbox as crediting funds via OCT is one of the most common transaction card transaction types. Learn more about Card Simulations here.
Retrieve shipping service
You can now retrieve the shipping service used to mail debit cards.This functionality is read-only. To learn more about this parameter, see the fulfillment sub-object in our Cards API reference page.
ACH originator dynamic naming
We have added a dynamic originator_name field to the ACH object that enables you to customize the originator name on individual ACH payments. This provides additional flexibility in controlling how payments appear on a receiving financial institution’s statements.
Please note that this feature is only available to customers partnered with banks that have enabled this capability. To learn more about enabling this feature for your organization, please reach out to your account manager.
2024 Predictions: What’s in Store for Embedded Finance and Bank Fintech Partnerships?
After a transformative year in the financial services realm, the question on everyone's mind is: What lies ahead in 2024? As we approach the year's end, it is an opportune time to assess the changes that have transpired in the past year and look ahead to what may happen next.
Get exclusive insights from industry leaders, including Treasury Prime CEO Chris Dean, CFO Meghan Ryan, and FS Vector Principal Ethan Singleton. We’ll peer into the crystal ball of embedded finance and explore cutting-edge developments, challenges, and opportunities that lie ahead in this dynamic industry.
Date: Thursday, December 14, 2023
Time: 11 a.m. PT, 2 p.m. EDT
Speakers: Chris Dean, Meghan Ryan, Ethan Singleton, FS Vector
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