Tomorrow is January 31st, which means it’s time to file 1099s!
You must file 1099s by January 31st. The Form 1099-NEC is a tax form that must be filed with the IRS (and the state, usually) if:
The BIG exception to the S Corp / C Corp rule is that you do have to send a Form 1099-NEC if they are a lawyer or medical professional.
But how do you know if they are an S Corp or C Corp? You ask them for the Form W-9 (see below) – if they return it and have indicated they are an S Corp or C Corp, then you don’t have to file the Form 1099-NEC. But it’s important to have that Form W-9 on file to show WHY you didn’t have to file the Form 1099-NEC, in case the IRS comes asking.
In order to file the Form 1099-NEC, you’ll need a Form W-9 from the contractor/vendor. This form gives you their identifying information (name, SSN/EIN, etc.) that you’ll need to fill out the form. We have a great W-9 request email template you can use here.
If your payroll or payment system doesn’t handle the 1099 filings for you, we recommend using a service like Tax1099.com or Track1099.com to file.
What if I paid via credit card or through Paypal? The Form 1099-NEC filing requirement is ONLY if you paid via cash, check or ACH bank transfer. If you paid via credit card, or through a third party processing platform like Paypal (business), Venmo (business), Stripe, etc. then you do not need to file a Form 1099-NEC. We DO NOT recommend filing one anyway (despite what some, ahem, accountants have said) – this could result in the income being double reported and create a headache for your contractor/vendor.