What Is Rents on 1099-MISC? Reporting Requirements
Learn the IRS reporting obligations for rent paid through a business. Understand the payer's role and requirements for issuing a Form 1099-MISC for rents.
Form 1099-MISC, Miscellaneous Information, is an IRS information return used to report certain payments made by a business to individuals or other entities. The form serves as a record for both the Internal Revenue Service (IRS) and the recipient, ensuring income is tracked for tax purposes. A common use for this form is to report payments for “Rents,” which are detailed in Box 1.
Reporting Requirements for Rent Payers
A business must issue a Form 1099-MISC for rent when payments are made in the course of a trade or business and total $600 or more to a single recipient in a calendar year. The term “trade or business” applies to any activity carried on for profit, including individuals whose main activity is renting out property. For example, a retail store paying $1,000 per month for its space must issue a 1099-MISC to its landlord.
This requirement extends to various rental situations, such as payments for office space, machinery, or even pasture land. However, payments made to a corporation, including an S or C corporation, for rent are generally exempt from this reporting requirement.
If rent is paid using a credit card, debit card, or a third-party payment network like PayPal, the reporting obligation shifts. In these cases, the payment settlement entity reports the transaction on Form 1099-K. For 2025, these networks must report aggregate payments exceeding $2,500.
These rules do not apply to personal payments. An individual paying rent for their personal residence is not operating a trade or business and does not need to issue a 1099-MISC to their landlord. The obligation is tied only to payments made for business purposes.
Information Needed to Issue Form 1099-MISC for Rents
To issue a Form 1099-MISC for rent, the payer must collect the recipient’s legal name, mailing address, and Taxpayer Identification Number (TIN). An individual’s TIN is their Social Security Number (SSN), while a business entity’s TIN is its Employer Identification Number (EIN).
The best way to gather this information is by having the recipient complete and sign an IRS Form W-9, Request for Taxpayer Identification Number and Certification. By signing, the recipient certifies that the TIN is correct and they are not subject to backup withholding. Payers should request a completed W-9 from any new recipient before making the first payment.
Once the W-9 is collected, the payer can prepare the Form 1099-MISC. The total amount of rent paid for the entire calendar year is entered into Box 1, labeled “Rents.” When filing with the IRS, payers must use the official, scannable Copy A, as photocopies are not accepted.
Filing the Form and Recipient Obligations
Payers must furnish Copy B of Form 1099-MISC to the recipient by January 31 of the year following payment. Copy A must be filed with the IRS by February 28 if filing by paper, or March 31 if filing electronically. Electronic filing is required for businesses that file 10 or more information returns in total.
The IRS provides a free online portal called the Information Returns Intake System (IRIS) for electronic filing. This system allows for manual data entry or file uploads and removes the need for Form 1096, the transmittal document for paper filing. Failure to meet filing deadlines can result in penalties that increase the longer the forms are overdue, with higher penalties for intentional disregard of the requirements.
Receiving a Form 1099-MISC with an amount in Box 1 means the recipient has taxable income to report on their federal tax return. For individuals or entities receiving rent for real estate, this income is reported on Schedule E (Form 1040), Supplemental Income and Loss. However, if the recipient is a real estate professional or provides significant services to the tenant, the income may be considered business income and reported on Schedule C (Form 1040).