How To Create and Send a 1099 Form to Your Contractor

What you need to produce a 1099

To produce a 1099, you need the contractor's full legal name, their Employer Identification Number (EIN) or Social Security Number (SSN), their mailing address, and the total amount you paid them during the calendar year. You also need your own business name, EIN, and address. The IRS provides the actual form — either Form 1099-NEC (for nonemployee compensation) or Form 1099-MISC (for miscellaneous income) — depending on what you paid for.

You can obtain blank 1099 forms from the IRS website, from tax software, or from office supply vendors. Many tax preparation platforms and accounting software packages include 1099 generation tools that walk you through the process and handle the formatting automatically. If you use a payroll service or accountant, they often produce these forms as part of their service.

The important date to send the form to your contractor is January 31 of the year following payment. The important date to file copies with the IRS is February 28 (or March 31 if filing electronically). Missing these dates can result in penalties, so marking your calendar now prevents problems later.

Key Takeaways

• You must report payments of $600 or more to a single contractor during a calendar year on a 1099 form, with limited exceptions for certain types of payments.
• Form 1099-NEC is used for nonemployee compensation; Form 1099-MISC is used for other types of payments like rent or royalties.
• You send the completed form to the contractor by January 31 and file a copy with the IRS by February 28 (or March 31 if filing electronically).
• The contractor's SSN or EIN, their full address, and the exact payment amount must be accurate on the form or the IRS may reject it.
• Tax software and accounting platforms can generate 1099s automatically if you enter the contractor information and payment amounts correctly.

Determining which 1099 form to use

Form 1099-NEC reports payments for services — what you paid an independent contractor, consultant, freelancer, or other self-employed person for work they performed. This is the most common 1099 for small businesses. Use this form if you paid someone to write code, design a website, provide consulting, repair equipment, or perform any other service.

Form 1099-MISC covers other types of payments: rent paid to an individual (not a corporation), royalties, prizes, awards, or payments to attorneys. If you rented office space from a person rather than a company, or paid someone for the right to use their intellectual property, 1099-MISC is the correct form. Some payments, like those to corporations or payments under $600, do not require a 1099 at all.

The IRS instructions for each form spell out which payments belong in each box. If you are unsure whether a payment requires a 1099, the safest approach is to report it — over-reporting is not penalized, but under-reporting is.

Gathering contractor information before you start

Contact each contractor and request their SSN or EIN before the end of the calendar year. Do not wait until January. If you cannot reach them or they do not respond, you will still need to file the 1099 with the IRS, but you may have to use a placeholder or incomplete information, which can trigger IRS notices later.

Ask for the contractor's full legal name exactly as it appears on their tax return — not a nickname or business name. Request their mailing address, including ZIP code. If they provided a W-9 form when you first hired them, that document already contains this information; check your files before asking again.

Verify the spelling of names and the accuracy of numbers. A transposed digit in an SSN or a misspelled name can cause the IRS to reject the form or send notices to the wrong person. If the contractor's information changes during the year, use the address where they lived or worked when you made the final payment.

Entering payment amounts and box assignments

Add up all payments you made to each contractor during the calendar year — January 1 through December 31. Include payments made by check, bank transfer, credit card, cash, or any other method. The total goes in Box 1 (Nonemployee compensation) on Form 1099-NEC or the appropriate box on Form 1099-MISC.

If you withheld federal income tax from the contractor's payments — which is rare for independent contractors but does happen in some situations — that amount goes in Box 4. If you withheld state income tax, that goes in the state tax section. Most small businesses do not withhold from contractor payments, so these boxes often remain blank.

Do not include payments to corporations, partnerships, or LLCs taxed as corporations. Do not include payments under $600 unless the contractor is in a specific category (such as a medical or health care provider, in which case the threshold is $600 for Form 1099-MISC). If you are unsure whether a payment meets the threshold, include it anyway.

Producing the form using software or manually

Tax software like TurboTax, H&R Block, and QuickBooks have built-in 1099 generators. You enter the contractor's name, SSN or EIN, address, and payment amount into the software, and it formats the form correctly, assigns the right boxes, and produces a printable version. This is the fastest and most accurate method for most small businesses.

If you use accounting software like QuickBooks or FreshBooks, you can often generate 1099s directly from your payment records. The software pulls the contractor information and payment totals from your existing data, reducing the chance of entry errors.

If you produce the form manually, read the blank form from the IRS website (irs.gov), print it, and fill it in by hand or typewriter. The IRS requires that entries be clear and legible. Do not handwrite the form if you can avoid it — printed entries are easier for the IRS to process and less likely to be rejected. You will need to produce two copies: one to send to the contractor and one to file with the IRS.

Sending the form to the contractor

Mail the completed 1099 to the contractor at their address by January 31. Include a cover letter or note explaining that this is their 1099 for the previous year. The contractor needs this form to file their own tax return, so sending it late can delay their filing.

Some contractors request the form by email or ask you to provide it electronically. Check with each contractor about their preference. If they request a digital copy, you can email a PDF or provide access through your accounting software, but you must still mail a physical copy unless they have explicitly waived that requirement in writing.

Keep a record of when you sent each form. If the IRS later questions whether you reported a contractor, you can show proof of mailing. A straightforward spreadsheet with the contractor's name, address, and mailing date is sufficient.

Filing with the IRS and keeping records

File Copy A (the IRS copy) of each 1099 with the IRS by February 28 if mailing, or by March 31 if filing electronically. You can file electronically through the IRS Filing Information Returns Electronically (FIRE) system or through approved tax software that submits 1099s directly to the IRS.

Include Form 1096 (Annual Summary and Transmittal of U.S. Information Returns) when you file your 1099s with the IRS. This cover sheet lists how many 1099s you are submitting and the total dollar amount reported. The IRS uses it to verify that all forms were received.

Keep a copy of each 1099 for your records for at least three years. Store it with your business tax return and payment records. If the IRS audits you, they will ask to see the 1099s you issued and the documentation showing that you actually made those payments.

Common mistakes to avoid

Mismatched names and SSNs are the most frequent error. If the contractor's name on the 1099 does not match the name on their tax return, the IRS will flag it. Double-check spelling and verify that you are using their legal name, not their business name or nickname.

Reporting the same payment twice — once on a 1099 and once on another form like a W-2 — creates confusion and can trigger IRS notices. If someone is a W-2 employee, do not issue them a 1099. If they are a contractor, do not issue a W-2.

Missing the important date is avoidable but common. Set a reminder in early January to gather contractor information and produce forms. If you miss the January 31 important date to send to the contractor or the February 28 important date to file with the IRS, file as soon as you can and be prepared to explain the delay if the IRS contacts you.

Forgetting to report a contractor because they were paid late in the year or in a lump sum is straightforward to do. Review your bank statements and payment records for the entire calendar year before you finalize your 1099 list.

Frequently Asked Questions

Do I have to issue a 1099 if I paid a contractor less than $600?

No, with a few exceptions. The $600 threshold applies to most types of nonemployee compensation. However, if the contractor is a medical or health care provider, the threshold is $600 for Form 1099-MISC. If you paid a corporation, you do not issue a 1099 regardless of the amount. When in doubt, issuing a 1099 is safer than not issuing one.

What if a contractor refuses to give me their SSN or EIN?

You are required to request it, and they are required to provide it. If they refuse, you can file the 1099 with the IRS using the information you have and note that the SSN or EIN was not provided. The IRS may then contact the contractor directly. Document your request in writing so you can show you made a good-faith effort.

Can I email the 1099 to the contractor instead of mailing it?

Only if the contractor has asked you in writing to receive it electronically. Otherwise, you must mail a physical copy. Some contractors prefer email for convenience, but the IRS rule requires mailing unless they have explicitly waived it. Ask each contractor their preference.

What happens if I file the 1099 late?

The IRS may assess a penalty if you file after the important date. The penalty amount depends on how late you file — penalties are lower if you file within 30 days of the important date than if you file much later. If you realize you missed the important date, file when ready and keep records showing when you filed in case the IRS contacts you.

Do I need to issue a 1099 to an LLC or S-corporation?

It depends on how the entity is taxed. If the LLC or S-corporation is taxed as a corporation, you do not issue a 1099. If the LLC is taxed as a sole proprietorship or partnership, you do issue a 1099. Ask the contractor how their business is structured for tax purposes, or request a W-9 form, which will clarify whether a 1099 is required.