What Vendors and Contractors Need a 1099?
In the new year, there are many deadlines quickly approaching that we need to be aware of. Please refer to our previous “Welcome to 2026, here is your tax roadmap” video: YouTube
Another upcoming deadline is January 31st, when you must file your 1099s.
Let’s clarify which vendors or contractors are required to receive a 1099.
In general, send 1099s to vendors or contractors who provided services and received $600 or more from you during the year.
Certain types of vendors always require a 1099, regardless of other factors.
- Legal Services.
- You must always issue a 1099 for legal services, regardless of whether the provider is an S corporation or a C corporation.
- Rent payments are another key area for 1099 requirements. Rent is a 1099 MISC
- If you rented office space, a warehouse, storage units, or land for business, send a 1099.
- Only issue a 1099 if you paid $600 or more for rent during the year.
Some service providers may or may not require a 1099, depending on circumstances.
- Anyone who is a Contractor or who provides Contractor services. Contractors receive 1099 NEC
- Employees who worked on the side
However, there are specific entities that do not need to receive a 1099.
- S-corporations
- C-corporations
To determine if a vendor is an S or C corporation, obtain a W-9 form from them.
The W-9 Form
The W-9 form indicates if the vendor is an S-Corporation or C-Corporation and whether they should receive a 1099.
If they select S-Corporation or C-Corporation on the W-9, do not send a 1099.
If the vendor selects any other option, issue a 1099.
Exception: If the vendor selects LLC on the W-9 and writes ‘S’ or ‘C’ at the end of the LLC classification line, this means the LLC is taxed as an S-Corporation or C-Corporation. In this case, they are treated like an S or C Corporation and do NOT get a 1099. If ‘S’ or ‘C’ is not indicated and another classification is selected, they DO get a 1099.
Other reasons to have a W-9 on file:
- It will provide their Federal Employer Identification Number (also called FEIN) or their Social Security Number (also called SSN)
- It will provide their street address.
- It will be signed
- When they sign the W-9, they are stating that all the information provided is correct. If they do NOT sign the W-9, YOU are taking on the liability for ensuring that all information on the W-9 is correct.
If you encounter a vendor who refuses to provide a W-9, follow these steps:
- Reach out to them several times by phone and email. Be very sure to document each attempt.
- If the vendor states that they refuse to provide a W-9, document that as well.
- However, you must still file the 1099. The difference when filing it is:
- You must file a paper copy instead of electronically filing.
- Where the EIN goes on the form, instead, put in “Refused.”
Contact Us
You can like and subscribe to our channel so that you are up to date on the YouTube videos we put out.
If you are looking for more help on filing 1099s or obtaining vendor W-9s, please feel free to reach out to us here at Waterford Business Solutions. You can call us at 864-351-0852 or send an email to info@waterfordbusines.com.
Additional Resources
For more information on IRS requirements, please check out the IRS website: https://www.irs.gov/
For more detailed information on 1099-MISC and 1099-NEC, please check out the IRS website: https://www.irs.gov/instructions/i1099mec.
