ADP Brokerage Services Group, a division of Automatic Data Processing, announced Tuesday that its software unit will team up with the Depository Trust & Clearing Corporation to upgrade year-end tax reporting for its customers on more than 12,000 mutual funds, real estate investment trusts (REITs) and other securities whose tax status is restructured at the end of the year.
ADP/SIS, the software arm of ADP Brokerage, will now be able to provide clients access to the DTCC domestic tax reporting service known as DTax. The DTax service provides vital year-end tax reclassification information to financial institutions, enabling them to streamline 1099 reporting to customers. The service replaces the antiquated manual reporting system that collects information by fax and phone.
"The number of income reclassifications has increased dramatically in the past few years, adding to our clients' already burdensome year-end workload," said David Swift, senior vice president and general manager of ADP/SIS. "Getting the information from a source as reliable as DTCC will not only streamline the process, but will result in more accurate tax reporting for our clients."
DTax was launched in 1998 in response to customers complaints about the existing and costly, paper-intensive processes.