When is IRS Form 1099-MISC, 1099-NEC, etc. required to be filed?
Is IRS Form 1099-MISC, 1099-NEC or some other variant of Form 1099 required to be filed?
For each person to whom you have paid the following during the year (Form 1099-MISC):
1️⃣ At least $600 in Rents (Box 1);
2️⃣ At least $10 in Royalties (Box 2);
3️⃣ At least $600 Other income (Box 3), including prizes and awards;
4️⃣ Any amount of Federal income tax withheld (Box 4); including backup withholding
5️⃣ Any fishing boat proceeds (Box 5);
6️⃣ At least $600 Medical and health care services (Box 6);
7️⃣ Direct Sales Totalling $5,000 or more (Box 7);
8️⃣ At least $10 in Substitute payments in lieu of dividends or interest (Box 8);
9️⃣ Crop insurance proceeds of $600 or more (Box 9);
🔟 Gross proceeds of $600 or more paid to an attorney, for example in a settlement agreement (Box 10, but payments to attorneys for services are reported on Form 1099-NEC);
⚖️ Fish purchased for resale (Box 11);
⚖️ Section 409A deferrals (Box 12);
⚖️ Excess golden parachute payments (Box 13); or
⚖️ Nonqualified deferred compensation (Box 14).
Note: It is important that you place the payment in the proper box on the form.
Refer to the instructions for more information.
Independent Contractor ➲ Federal Compliance Obligations
Any business or government entity (including nonprofit organisations) making payments for service performed by an Independent Contractor (who is not a Corporation# or an International Contractor^) is most likely required (unless an exception applies) by 31 Jan each year to:
1️⃣ File IRS Form 1099-NEC; AND
2️⃣ Furnish a statement to the Recipient.
When is IRS Form 1099-NEC (Non-Employee Compensation) required to be filed?
If the following 4 conditions are met, you MUST generally report a payment as NEC:
1️⃣ You made the payment to someone who is not your employee (ie., an Independent Contractor excluding International Contractors^);
2️⃣ You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
3️⃣ You made the payment to an individual, partnership, estate, or, in some cases, a Corporation#; and
4️⃣ You made payments to the payee of at least $600 during the year.
For each person to whom you have paid at least $600 for the following during the year (Form 1099-NEC):
✅ Services performed by someone who is not your employee (including parts and materials); or
✅ Payments to an attorney (including law firms or other providers of legal services).
Notes:
You MUST File Form 1099-NEC or Form 1099-MISC to report sales totaling $5,000 or more of consumer products to a person on a buy-sell, a deposit-commission, or other commission basis for resale.
You MUST also file Form 1099-NEC for each person from whom you withheld any Federal Income Tax (Box 4 of Form 1099-NEC) under the backup withholding rules regardless of the amount of the payment.
Refer to the instructions for more information.
Other Form 1099 Categories
⚖️ Interest on a business debt to someone (excluding interest on an obligation issued by an individual) (Form 1099-INT);
⚖️ Dividends or other distributions to a company shareholder (Form 1099-DIV);
⚖️ Distribution from a retirement or profit plan or from an IRA or insurance contract (Form 1099-R); or
⚖️ Payments to merchants or other entities in settlement of reportable payment transactions, that is, any payment card or third party network transaction (Form 1099-K).
Received a Payment and Other Reporting Situations
If, as part of your trade or business, you received any of the following types of payments, use the link to be directed to information on filing the appropriate information return.
⚖️ Payment of mortgage interest (including points) or reimbursements of overpaid interest from individuals (Form 1098)
⚖️ Sale or exchange of real estate, for example the person responsible for closing the transaction (Form 1099-S)
⚖️ You are a broker and you sold a covered security belonging to your customer (Form 1099-B)
⚖️ You are an issuer of a security taking a specified corporate action that affects the cost basis of the securities held by others (Form 8937)
⚖️ You released someone from paying a debt secured by property or someone abandoned property that was subject to the debt (Form 1099-A) or otherwise forgave their debt to you (Form 1099-C)
⚖️ You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment (Form 1099-MISC)
10 or More IRS Information Returns ➲ E-filing Now Required!
Starting tax year 2023, if you have 10 or more information returns, you MUST file them electronically.
This includes Forms W-2, e-filed with the Social Security Administration.
Find details on the final e-file regulations and requirements for Forms W-2.
To e-file, apply now for a Transmitter Control Code (TCC).
It may take up to 45 days for processing.
You can e-file any Form 1099 for tax year 2022 and later with the Information Returns Intake System (IRIS).
The system also lets you file corrections and request automatic extensions for Forms 1099.
For system availability, check IRIS status.
There are 2 ways to e-file with IRIS.
Source: E-file Forms 1099 with IRIS
Resolving Irregularities
If you are a recipient or payee of an incorrect Form 1099-MISC contact the payor.
If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
If you are a recipient or payee expecting a Form 1099-MISC and have not received one, contact the payor.
Refer to the instructions for more information.
Not Required to File 1099 Information Returns
You are not required to file information return(s) if any of the following situations apply:
⚖️ You are not engaged in a trade or business.
⚖️ You are engaged in a trade or business; and
❌ The payment was made to another business that is incorporated, but was not for medical or legal services;
❌ The sum of all payments made to the person or unincorporated business is less than $600 in one tax year; or
❌ ^ The payment was made to an International Contractor (not a US-Citizen) performing services outside the U.S.
Source: IRS ➲ Am I Required to File a Form 1099 or Other Information Return?
Credits:
This FAQ was created by James D. Ford Esq., GAICD CIPP/US CC | Attorney-at-Law, Blue Ocean Law Group℠.
State of California Bar Number: 346590