Diego Fertility Center Egg Donor Program
Hello SDFC Egg Donors:
For many egg donor cycles conducted with SDFC in 2018, you should now be in receipt of a 1099 tax form documenting the amount of compensation earned. However this year, we began transitioning to external escrow companies issuing compensation checks as California law dictates that egg donor & surrogate compensation must be held by a third party trust company.
Here is their explanation as to why you will no longer receive these tax documents:
- According to Title 26 of the Internal Revenue Code, 26 CFR 1.6041-1(e)(1)(i), it is not necessary for a “person who performs mere administrative or ministerial functions such as writing checks at another’s direction” to provide a return of information to a payee. Therefore, a law firm acting as a trust holder, and an agency acting as a matching service, do not have any obligation to provide 1099s to egg donors under the current tax code.
- Additionally, individuals who enter into arrangements that are not part of their trade or business, such as intended parents and egg donors in egg donation arrangements, do not have an obligation to provide information returns. However, if a person obtains payment, but does not receive a 1099, the person is still required to self-report and pay taxes on the payment (income) received.
Thus, it is the responsibility of the egg donor to self-report and pay taxes on all income received from an egg donation agreement. We strongly encourage you to speak to your tax preparer about any compensation you may have received in 2018 so that they can properly determine your tax liability.
CRYSTAL BAILEY, Egg Donor Program Manager
11425 El Camino Real, San Diego, CA 92130
T 858.794.6363 F 858.794.6360