Which 1099 Copies Go to the Recipient?

Taxpayers often encounter various tax forms beyond the familiar W-2, especially when receiving income not classified as regular wages or salaries. The Internal Revenue Service (IRS) uses 1099 forms to report these diverse types of non-employment income. These forms serve as information returns, detailing payments made by businesses or other entities to individuals throughout the year. They help ensure accurate income reporting to the IRS, allowing the agency to verify what taxpayers declare on their annual tax returns.

Understanding 1099 Copy Designations

Each 1099 form comes with several copies, each designated for a specific recipient or purpose. Copy A is for the IRS, while Copy 1 is for the relevant state tax department. Recipients use Copy B for their federal income tax return. Copy C, or sometimes Copy 2 depending on the specific form, is for the recipient’s personal records. Copy 2 is also provided for filing with a state income tax return if required by the state.

Recipient Copies for Common 1099 Forms

For various types of non-employment income, specific 1099 forms are issued.

1099-NEC (Nonemployee Compensation)

Form 1099-NEC reports income paid to non-employees, such as independent contractors or freelancers, when payments total $600 or more in a calendar year. Recipients receive Copy B for their federal income tax return, Copy 2 for state or local tax filings if applicable, and Copy C for their personal records.

1099-MISC (Miscellaneous Information)

This form covers various types of miscellaneous income not reported on 1099-NEC, including rents, royalties, prizes, and other payments of $600 or more, or royalties of $10 or more. Recipients receive Copy B for their federal tax return, Copy 2 for state tax purposes, and Copy C for their records.

1099-INT (Interest Income)

Form 1099-INT reports interest income earned from sources like banks, credit unions, and investment firms, for amounts of $10 or more. Recipients are provided with Copy B for their federal tax return, Copy 2 for state tax filings if necessary, and Copy C for their personal files.

1099-DIV (Dividends and Distributions)

This form details dividends and other distributions from stocks, mutual funds, and other investments, when the amount is $10 or more. Recipients receive Copy B for their federal tax return, Copy 2 for state tax returns where applicable, and Copy C for their records.

1099-K (Payment Card and Third Party Network Transactions)

Form 1099-K reports payments processed through payment card transactions and third-party payment networks, such as online marketplaces or payment apps for business transactions. Recipients receive Copy B for federal tax filing, Copy 2 for state reporting, and Copy C for their records.

1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.)

This form reports distributions from various retirement plans and insurance contracts. Recipients are issued Copy B for federal tax purposes, Copy 2 for state or local tax filings, and Copy C for their personal records.

1099-G (Certain Government Payments)

Form 1099-G reports government payments like unemployment compensation, state or local income tax refunds, or taxable grants, if the amount is $10 or more. Recipients receive Copy B for their federal tax return, Copy 2 for state income tax purposes, and Copy C for their records.

1099-B (Proceeds From Broker and Barter Exchange Transactions)

This form reports proceeds from the sale of securities, such as stocks and bonds, and certain barter exchange transactions. Recipients are provided with Copy B for their federal tax return, Copy 2 for state tax filings if applicable, and Copy C for their personal record keeping.

Recipient Actions and Deadlines

Once 1099 forms are received, recipients should carefully review the information for accuracy, including their name, Social Security number, and the reported income amount. Any discrepancies should prompt immediate action to ensure correct tax reporting. Recipients should retain copies of all 1099 forms, along with other supporting tax documents, for at least three years from the date their tax return was filed or due, whichever is later. Payers are generally required to issue most 1099 forms to recipients by January 31st of the year following the tax year for which the income was paid. If a 1099 form is not received by early February, or if it contains incorrect information, the recipient should first contact the payer to request a copy or a corrected form. If the payer does not respond or cannot provide the necessary document, the recipient can then contact the IRS for assistance. It is important to remember that even if a 1099 is not received, all income must still be reported on the tax return.