How to Get a 1099 for Businesses and Contractors

A Form 1099 is a series of documents the Internal Revenue Service (IRS) refers to as “information returns.” There are several versions of the form, each designed to report specific types of income paid by a business to a recipient who is not an employee.

The primary purpose of these forms is to create a paper trail that helps the IRS track payments that might otherwise go unreported. The information on the form allows the IRS to verify that individuals and businesses are reporting their income correctly. For the recipient, the form serves as an official record of earnings that is necessary for preparing their own tax return.

Steps for Workers Expecting a Form 1099

Independent contractors, freelancers, and other self-employed individuals should anticipate receiving a Form 1099-NEC from any single client that paid them $600 or more for their services during the calendar year. Payers are required to mail or electronically deliver this form to the recipient by January 31 of the year following the payments.

If the January 31 deadline passes and you have not received a 1099-NEC from a client who paid you over the $600 threshold, the first step is to contact the payer directly. The form may have been lost in the mail or sent to an incorrect address, and the business can issue a replacement. It is important to confirm that the payer has your correct mailing address and Taxpayer Identification Number (TIN) on file.

Even if a client fails to send a Form 1099-NEC, the legal responsibility to report that income to the IRS remains with the worker. All income, whether reported on a 1099 or not, must be included on your tax return. You can use your own business records, such as bank deposits, invoices, and accounting software reports, to accurately calculate your total earnings.

Should you receive a Form 1099-NEC with incorrect information, such as a misspelled name, wrong TIN, or an inaccurate payment amount, you must contact the payer immediately. Ask them to issue a corrected Form 1099. Filing a tax return with information that does not match what the IRS has on record from the payer can lead to processing delays, notices, and potential penalties.

Required Information and Forms for Payers

Before a business can issue a Form 1099, it must collect specific information from the payee. The standard method for this is to have the contractor or vendor complete a Form W-9, Request for Taxpayer Identification Number and Certification. This form provides the payee’s legal name, business name if different, current address, and their TIN, which is typically either a Social Security Number (SSN) or an Employer Identification Number (EIN).

It is a best practice to collect a completed Form W-9 from every vendor before making any payments. If a payee fails to provide a TIN, you may be required to withhold 24% of the payments and remit it to the IRS, a process known as backup withholding.

The most common form for reporting payments for services rendered by an independent contractor is Form 1099-NEC, Nonemployee Compensation. This form is specifically for payments of $600 or more made to non-employees. Another related form, the 1099-MISC, Miscellaneous Information, is used for other types of payments, such as rent, prizes, awards, or payments to an attorney.

Businesses cannot simply download and print a usable Copy A of Form 1099 from the IRS website for paper filing. The official forms are scannable and printed with special red ink. These must be ordered directly from the IRS or purchased from authorized vendors like office supply stores or tax software providers.

The Filing Process for Payers

After completing the forms with the payee’s information and payment amounts, the next step is distribution. Copy B of the Form 1099-NEC must be sent to the recipient by January 31. This same deadline applies for filing Copy A of the 1099-NEC with the IRS, regardless of whether you file by paper or electronically.

For businesses that choose to file paper forms with the IRS, all 1099s must be sent with a summary document called Form 1096, Annual Summary and Transmittal of U.S. Information Returns. A separate Form 1096 is required for each type of information return being filed. For example, if you are filing both Forms 1099-NEC and 1099-MISC, you must prepare two separate Form 1096 transmittals.

The IRS requires electronic filing for businesses that file 10 or more information returns in total during a calendar year. To determine if they meet the 10-return minimum, filers must aggregate most information returns, such as Forms W-2, 1099-NEC, and 1099-MISC. Electronic filing can be done through the IRS’s Filing Information Returns Electronically (FIRE) system or the newer Information Returns Intake System (IRIS) portal. When filing electronically, Form 1096 is not used, as the online system handles the summary and transmittal process automatically.