A Guide to “Who Should Receive a 1099?”
It’s that time of year again to begin thinking about who should receive 1099 forms. As a general rule, 1099 forms should be issued to all vendors who are paid $600 or more throughout the year for rent or services rendered.
1099-MISC
Vendors who you pay rent to for office space, machines or equipment use, and/or pasture usage, just to name a few, should receive a 1099 form if the amount paid in the calendar year exceeds $600.
1099-NEC
When it comes to services rendered to your business, you should issue a 1099 to vendors who meet ALL of the following criteria:
- You made the payment to an individual or business who is not your employee.
- You made the payment for services incurred in the course of your trade or business.
- You made payments to the vendor of at least $600 during the year
Examples of the services:
- Payments for professional service fees, such as to an attorney, accountant, contractor, etc.
- Payments for repairs to items such as equipment, buildings, vehicles, etc.
- Payments made to sub-contractors for their work within your business
Corporations do not receive 1099s. Pay extra attention to limited liability companies (LLC) to see if they qualify for this exception – not all LLC’s are corporations! If you are unsure whether a business is registered as a corporation, ask the vendor to fill out a W-9 form – refer to our blog post from February 2024 if you have questions about the W-9 form.