How To Send a 1099 to Your Contractor or Service Provider

You send a 1099 to report what you paid a contractor, not to collect money from them

A 1099 form documents non-employee payments you made during a tax year. You send it to the person or business you paid, and you also send a copy to the IRS. The form shows how much money changed hands — nothing more. It does not collect payment, request reimbursement, or settle a dispute. If someone owes you money, a 1099 is not the tool; if you owe someone money and are documenting it for tax purposes, a 1099 is what you use.

The person receiving the 1099 needs it to report their income on their own tax return. The IRS receives a copy so it can match what the contractor reports against what you reported paying them. Sending a 1099 is a tax reporting requirement, not a payment method.

Key Takeaways

• You must send a 1099-NEC or 1099-MISC to anyone you paid $600 or more in a calendar year for services, unless they are a corporation or you paid them as an employee.
• You send the form to the contractor by January 31 of the year after payment, and send a copy to the IRS by the same date.
• The IRS Form 1096 is the cover sheet that bundles all your 1099s together when you file them with the IRS.
• You keep a copy of every 1099 you send for your own records, separate from what you send to the contractor and the IRS.

When you must send a 1099

You send a 1099 when you paid someone for work or services and that person is not your employee. The threshold is $600 in a single calendar year. If you paid a plumber, freelance writer, consultant, or other independent contractor $600 or more between January 1 and December 31, you report it on a 1099.

Corporations are an exception: if you paid a business that is incorporated, you do not send a 1099 even if the payment was $600 or more. You still track the expense for your own records, but the IRS does not require a 1099 for corporate payments. If you are unsure whether the person is incorporated, ask them directly or check your state's business registration database.

Payments to employees do not get a 1099. Employees receive a W-2 form instead, which you handle through payroll. If someone worked for you and you withheld taxes, they are an employee and you issue a W-2, not a 1099.

Which 1099 form to use

The two most common forms are 1099-NEC (Nonemployee Compensation) and 1099-MISC (Miscellaneous Income). For most contractor payments — writing, consulting, repairs, design work — use the 1099-NEC. This is the standard form for services.

Use 1099-MISC for specific types of payments: rent paid to a landlord, royalties, medical and health care payments, or payments to an attorney. If you are unsure which form applies, the 1099-NEC covers most situations. The contractor's industry or the nature of the work usually determines which form is correct.

You can obtain blank forms from the IRS website (irs.gov) or order them from tax software providers, office supply stores, or your accountant. Many tax software packages generate the forms for you if you enter the payment information.

Information you need to gather before sending

Before you fill out a 1099, collect the contractor's name, address, and Taxpayer Identification Number (TIN). The TIN is usually a Social Security Number (SSN) for individuals or an Employer Identification Number (EIN) for businesses. You should have asked for this when you first hired the contractor; if you did not, contact them and request it before year-end.

You also need the exact dollar amount you paid them during the calendar year. Add up all payments — whether by check, bank transfer, credit card, or cash — that you made to that person between January 1 and December 31. Include only the year you are reporting; do not mix payments from different years.

If the contractor did not provide their TIN, you are still required to send the 1099, but you must mark the form to show that the TIN was not provided. The IRS may then contact the contractor to obtain it. Do not skip sending the form because you lack the TIN.

Steps to complete and send the 1099

Fill in the form with your business name and address in the "Filer" section (the top of the form). Enter the contractor's name and address in the "Recipient" section. Write their TIN in the box provided. In the payment box (usually Box 1 on a 1099-NEC), enter the total amount you paid them during the year.

Make three copies: one for the contractor, one for the IRS, and one for your records. Sign and date the form. Mail or deliver the contractor's copy to them by January 31 of the following year. For example, if you paid someone in 2024, send them the 1099-NEC by January 31, 2025.

File the IRS copy along with Form 1096 (the cover sheet) by the same January 31 important date. You can mail these to the IRS address listed on the 1096 instructions, or file electronically if you have multiple forms. Keep your copy in your tax records for at least three years.

Using Form 1096 to file with the IRS

The Form 1096 is a summary sheet that bundles all your 1099s together. If you are sending only one 1099 to the IRS, you still need a 1096 to accompany it. If you are sending ten 1099s, you use one 1096 that lists all ten forms.

On the 1096, enter your name, address, and TIN in the top section. Count how many 1099s you are filing and enter that number in the box labeled "Total number of forms." Add up all the dollar amounts from all your 1099s and enter the total in the "Federal income tax withheld" box (or the appropriate box for the type of 1099 you are filing). Sign and date the form.

Mail the 1096 and all attached 1099 copies to the IRS address shown in the 1096 instructions. The address changes by region, so check the current instructions before mailing. The important date is January 31 of the year following the tax year you are reporting.

What happens after you send the 1099

Once the contractor receives their copy, they are responsible for reporting that income on their own tax return. The IRS receives its copy and compares it to what the contractor reports. If the contractor does not report the income, the IRS may contact them or assess penalties.

You have now fulfilled your reporting obligation. Keep your copy in your files. If the contractor later disputes the amount or claims they never received the form, your copy proves you sent it and what amount you reported.

If you discover an error after sending — for example, you reported the wrong amount or the wrong name — you can file a corrected 1099-NEC or 1099-MISC. Mark it as "CORRECTED" and send it to both the contractor and the IRS using the same process and important date as the original.

Frequently Asked Questions

What if I paid someone less than $600 in a year?

You are not required to send a 1099 for payments under $600. However, you may still send one if you want to document the payment. The contractor would still report it as income on their tax return if they received a 1099 from you.

Can I send a 1099 by email instead of mail?

You can deliver the contractor's copy by email if they consent to electronic delivery. The IRS copy must be mailed or filed electronically through an approved system. Check the current IRS instructions for electronic filing options, as these change year to year.

What if the contractor says they did not receive their copy?

Keep a record of when and how you sent it. If you mailed it, send it again by certified mail so you have proof of delivery. If you emailed it, keep the email receipt. You have fulfilled the requirement once you send it; you are not responsible if they lose it, but proof of sending protects you if questions arise later.

Do I need to send a 1099 to a business owner who is incorporated?

No. If the business is incorporated (a C corporation or S corporation), you do not send a 1099 even if you paid them $600 or more. If you are unsure about their business structure, ask them directly or check your state's Secretary of State database.

What if I paid someone in cash and have no receipt?

You are still required to send a 1099 if you paid $600 or more, even if you have no receipt. Report the amount you believe you paid based on your records or memory. The contractor will also report what they received, and the IRS will compare the two amounts.