Do C Corps Get a 1099? The Rules for Receiving and Issuing

A C Corporation is a legal business structure separate from its owners, offering liability protection to shareholders. The corporation itself, not its owners, is taxed on its profits. IRS Form 1099 is an information return used to report various types of income other than wages, salaries, and tips, which are reported on Form W-2. These forms help the IRS track income received by individuals and certain entities.

C Corporations as Payees: The General Rule

Businesses are not required to issue Form 1099 to C corporations for payments made for services or goods. This exemption applies to most types of payments. C corporations have their own comprehensive tax reporting obligations.

C corporations file their income and expenses directly with the IRS on Form 1120, the U.S. Corporation Income Tax Return. This form details the corporation’s income, gains, losses, deductions, and credits. Since the income is already reported at the corporate level, the IRS does not require an additional Form 1099 from the payer.

This exemption also extends to Limited Liability Companies (LLCs) that have elected to be taxed as C corporations. To confirm a payee’s tax classification, businesses request a completed Form W-9, which indicates whether the entity is a corporation. Payments made via credit card, debit card, or through third-party payment processors like PayPal or Stripe are also exempt from 1099-NEC reporting, as these are reported on Form 1099-K by the payment processor.

Exceptions for C Corporations Receiving 1099s

While C corporations do not receive 1099s, there are specific exceptions. Payments made to attorneys for legal services must be reported on a Form 1099-NEC, even if the attorney operates as a C corporation.

Payments for medical and healthcare services are also an exception. If a business pays $600 or more to a C corporation for medical or healthcare services, a Form 1099-MISC must be issued. This includes payments to incorporated medical practices and veterinary services. Gross proceeds paid to an attorney in connection with legal services, such as settlement agreements, are also reportable on Form 1099-MISC. Payments for fish purchased for cash are another specific instance requiring a 1099-NEC for C corporations.

C Corporations as Payers: Issuing 1099s

When a C corporation makes payments to other entities, it must issue 1099 forms. A C corporation must issue Form 1099-NEC, Nonemployee Compensation, for payments of $600 or more to independent contractors for services performed in the course of the business. This includes payments to individuals, partnerships, and LLCs treated as disregarded entities or partnerships.

The threshold for reporting nonemployee compensation will increase from $600 to $2,000 after December 31, 2025, with future adjustments for inflation. C corporations must issue Form 1099-MISC for other types of payments totaling $600 or more, such as rents, prizes and awards. Royalty payments of $10 or more also require a Form 1099-MISC.

C corporations do not issue 1099 forms to other corporations, including S corporations, with the same exceptions noted previously for recipients. Payments to another C corporation for legal services or medical/healthcare services still require a 1099 from the paying C corporation. The deadline for sending Copy B of Form 1099-NEC to payees and filing Copy A with the IRS is January 31. For Form 1099-MISC, the due date for paper filing is February 28, and for electronic filing, it is March 31.