Does a Limited Liability Company Partnership Get a 1099?

A Form 1099 is a type of information return used by the Internal Revenue Service (IRS) to track various types of income received by individuals and businesses that are not employees. For a Limited Liability Company (LLC) that has elected to be taxed as a partnership, understanding these forms is important for proper tax compliance. These entities, while offering liability protection, operate under specific tax rules that involve reporting certain payments made and received.

LLC Partnerships and 1099 Fundamentals

An LLC taxed as a partnership functions as a pass-through entity for tax purposes. This means the business itself does not pay income tax; instead, profits and losses are passed through to the individual partners who report them on their personal tax returns. The LLC files an informational return, Form 1065, U.S. Return of Partnership Income, to report its financial activity to the IRS. This form then generates Schedule K-1s for each partner, detailing their share of the partnership’s income, deductions, credits, and other items.

Form 1099s serve as official statements detailing specific types of payments made during the year. The most common forms relevant to businesses include Form 1099-NEC, used for reporting non-employee compensation, and Form 1099-MISC, which covers various miscellaneous income categories like rent. These forms help the IRS match income reported by payers with income reported by recipients, ensuring accurate tax reporting. For an LLC taxed as a partnership, dealing with 1099s involves both the possibility of receiving them from others and the obligation to issue them to certain payees.

Receiving 1099s as an LLC Partnership

An LLC taxed as a partnership may receive various 1099 forms from other businesses. If the LLC provides services, such as consulting or freelance work, and receives $600 or more in payments during a calendar year, the paying business is generally required to issue a Form 1099-NEC to the LLC. This form reports the total non-employee compensation paid to the LLC for its services. Similarly, if the LLC rents out property, such as office space, and receives $600 or more in rent from a commercial tenant, the tenant may issue a Form 1099-MISC to the LLC.

Receiving a 1099 form serves as an official notification to the IRS that your LLC has received a specific amount of income from a particular source. This reported income must then be included in the LLC’s overall income calculations for its tax return. The amounts reported on these 1099s are reflected on the LLC’s Form 1065, and subsequently allocated to the partners via their Schedule K-1s for their individual tax filings.

Issuing 1099s from an LLC Partnership

An LLC taxed as a partnership is often required to issue 1099 forms to individuals or unincorporated businesses to whom it has made certain types of payments. For the current 2025 tax year, if your LLC pays an independent contractor, freelancer, or other non-employee $600 or more for services rendered in a calendar year, you must issue them a Form 1099-NEC. This includes fees for professional services like those paid to accountants, architects, or engineers, as well as payments for parts or materials if they are incidental to the service provided. However, beginning with payments made in the 2026 tax year, the reporting threshold for Form 1099-NEC will increase to $2,000, with future adjustments for inflation starting in 2027.

Similarly, if your LLC makes rent payments of $600 or more for commercial property, such as office space, or for machine rentals, you would generally report these on Form 1099-MISC. Before making payments that might require a 1099, it is important to request a Form W-9, Request for Taxpayer Identification Number and Certification, from the payee. This form provides the necessary Taxpayer Identification Number (TIN), such as a Social Security Number (SSN) or Employer Identification Number (EIN), along with other crucial information needed to accurately complete the 1099 form.

There are specific exemptions to the requirement of issuing 1099 forms. Generally, payments made to corporations, including LLCs that are taxed as C or S corporations, do not require a 1099. However, this corporate exemption has notable exceptions. Payments for legal services, such as attorneys’ fees, or payments for medical and healthcare services must be reported on a 1099 form, regardless of whether the service provider is a corporation. Additionally, if federal income tax was withheld from a payment, a 1099-NEC must be filed regardless of the payment amount.

Preparing and Filing 1099 Forms

After gathering all necessary information, such as from W-9 forms and payment records, an LLC taxed as a partnership must accurately complete the relevant 1099 forms. For the 2025 tax year, Form 1099-NEC is used for non-employee compensation, while Form 1099-MISC is for other types of miscellaneous income like rents. Each form requires precise details including the payee’s name, address, Taxpayer Identification Number, and the total amount paid during the calendar year.

The deadlines for 1099 forms are important for compliance. Copies of Form 1099-NEC must be furnished to recipients and filed with the IRS by January 31st of the year following the payment year. For Form 1099-MISC, copies generally must be provided to recipients by January 31st, though some specific boxes have a February 15th deadline. The filing deadline for Form 1099-MISC with the IRS is February 28th if filing by paper, or March 31st if filing electronically.

Electronic filing of information returns, including 1099s, is generally required if your LLC files 10 or more returns in a calendar year, aggregating all types of information returns. This threshold, which was lowered from 250 returns, applies to returns required to be filed after December 31, 2023. Businesses can use the IRS’s Filing Information Returns Electronically (FIRE) system or the newer Information Reporting Intake System (IRIS) to e-file.