How to Correct an Incorrect Form 1099-MISC

Form 1099-MISC is an Internal Revenue Service (IRS) document used to report various types of miscellaneous income paid to individuals or entities during a tax year. This form tracks payments not reported as wages, salaries, or nonemployee compensation (now generally on Form 1099-NEC). Common payments include rents, royalties, prizes, awards, and payments to attorneys, typically for amounts of $600 or more, or $10 or more for royalties. Accurate reporting is important for both the payer, who needs proper business deductions, and the recipient, who must include this income on their tax return. Errors can occur in the preparation of these forms, and understanding how to address them is necessary for maintaining tax compliance.

Identifying Errors and Correction Triggers

Various types of inaccuracies can appear on a Form 1099-MISC, necessitating a correction. Common errors include incorrect income amounts, misspelled recipient names, or inaccurate Taxpayer Identification Numbers (TINs), such as a Social Security Number or Employer Identification Number. Other errors include checking the wrong box or issuing a 1099-MISC when a different form, like a 1099-NEC, was needed. Missing TINs or using the wrong tax year also trigger corrections.

Corrections should be made as soon as an error is discovered by either the payer or recipient. Prompt action ensures correct information is on file with the IRS and recipient, preventing tax filing discrepancies. While no strict deadline exists, the IRS prefers corrections within three years of the original filing date, aligning with the period for amending personal tax returns.

Preparing the Corrected Form

Correcting a Form 1099-MISC requires preparing a new form, not altering the original. Mark the “CORRECTED” box with an “X” to signal to the IRS that it replaces a previous incorrect form. Blank forms can be obtained directly from the IRS website or through office supply stores. Complete all fields accurately, even those correct on the original, for proper processing.

Two types of corrections address different errors. Correction A applies to incorrect money amounts, codes, or checkboxes. Prepare a new Form 1099-MISC with the “CORRECTED” box checked, entering all correct information, including the accurate amount. This form replaces the original submission.

Correction B is for incorrect recipient names, TINs, or if the original form lacked a payer TIN. This error requires a two-step process. First, prepare a new Form 1099-MISC with the “CORRECTED” box checked. Enter the incorrect recipient name and TIN exactly as they appeared, but use “0” for all money amounts. This voids the incorrect reporting. Do not check the “VOID” box, as this can cause the IRS to ignore the submission.

Next, prepare a second Form 1099-MISC with the correct recipient name, TIN, and accurate money amounts. This second form should not have the “CORRECTED” box checked. This ensures the IRS receives the accurate information for the intended recipient. If an account number was used on the original form, it should be included on both parts of the Correction B submission to help the IRS match the corrected records.

Submitting the Corrected Form

After preparing the corrected Form 1099-MISC, submit it to the IRS and provide a copy to the recipient. When filing paper copies, a new Form 1096, “Annual Summary and Transmittal of U.S. Information Returns,” must accompany the submission. This transmittal form summarizes the corrected information. Use a separate Form 1096 for each type of return being corrected.

Mailing addresses for paper Forms 1099-MISC and Form 1096 vary by payer’s location. The IRS has specific processing centers, such as those in Austin, TX, and Kansas City, for information returns; detailed addresses are in the official IRS instructions. Electronic filing is generally required for entities filing ten or more information returns in aggregate, including Forms W-2, 1099-MISC, and 1099-NEC. Electronic filing offers faster processing and greater accuracy.

Provide a copy of the corrected Form 1099-MISC to the recipient, ensuring they have the accurate tax document for their return. While no rigid deadline exists, submit corrected forms as soon as possible after discovering an error. Recipients should generally receive copies by January 31st. Paper forms are due to the IRS by February 28th, and electronic filings by March 31st. Prompt correction helps avoid IRS issues for both parties.

Actions for Recipients of Incorrect Forms

If you receive an inaccurate Form 1099-MISC, take clear steps to address it. First, contact the payer who issued the incorrect form. Clearly explain the error, provide correct details, and specify inaccurate information. Requesting a corrected Form 1099-MISC from the payer is the most straightforward resolution.

If the payer is unresponsive or unwilling to issue a corrected form, you can still file an accurate tax return. File your tax return using the correct income information, not the erroneous amount on the Form 1099-MISC. Do not delay filing past the official deadline while waiting for a corrected form.

To prevent IRS issues, attach a statement to your tax return. This statement should explain the discrepancy between the Form 1099-MISC and your reported income, detailing steps taken to resolve the error (e.g., contacting the payer). Include supporting documentation, like personal records. While an explanation may slightly increase the chance of an IRS inquiry, it demonstrates compliance and accurate income reporting.