Who Gets a 1099 Form From You

You send a 1099 to anyone you paid more than $600 in a calendar year for services or goods — and you keep a copy for your own tax records

The person or business who receives payment from you needs a 1099 so they can report that income to the IRS. You are not sending it to the IRS directly; you are sending it to the worker or vendor, and you file a separate copy with the IRS yourself when you do your taxes. The $600 threshold is the most common one, though some 1099 types have different minimums.

You only send a 1099 to people you paid as independent contractors or vendors — not to employees on your payroll. If someone is an employee, you send them a W-2 instead. The distinction matters: employees have taxes withheld by you; contractors report their own income and handle their own tax obligations.

Key Takeaways

• Send a 1099 to any independent contractor, freelancer, or vendor you paid more than $600 in a single calendar year for work or goods.
• You must send the 1099 to the recipient by January 31 of the year following payment, and file your copy with the IRS by the same date.
• Do not send a 1099 to employees; send them a W-2 instead, and do not send one to corporations unless you paid them for services over $600.
• Keep records of what you paid each person — dates, amounts, and what the payment was for — so you can fill out the form accurately.

Who counts as someone you send a 1099 to

A 1099 goes to anyone you paid for services or goods who is not your employee. This includes freelancers, consultants, contractors, vendors, and self-employed people. If you hired a plumber to fix your business pipes, paid a graphic designer for a logo, or bought inventory from a supplier, those are all 1099 situations if the total for the year hits $600.

The key is that you did not withhold taxes from their paychecks. They are responsible for reporting the income themselves and paying their own self-employment tax. If you are unsure whether someone is an employee or a contractor, the IRS has a test based on how much control you have over their work — but in practice, if you are not running payroll for them, they are a contractor.

You do not send a 1099 to a corporation for services, even if you paid them over $600. Corporations file their own tax returns and report income differently. You also do not send a 1099 to a sole proprietor or LLC if they provided services and you paid them over $600 — wait, that is wrong. You do send a 1099 to a sole proprietor or LLC for services. You do not send one to a corporation for services.

The $600 threshold and other payment limits

The most common rule is that you send a 1099 if you paid someone more than $600 in a calendar year. That $600 is the total across all payments to that person in that year — if you paid a contractor $300 in March and $400 in September, that is $700 total, so you send a 1099.

Some types of 1099 have different thresholds. For example, if you paid someone for rent, the threshold is $600. If you paid for royalties, it is also $600. If you paid for attorney fees, it is $600. The $600 rule covers most common business payments. If you are unsure about a specific type of payment, check the IRS instructions for the form you are using.

The threshold resets every calendar year on January 1. If you paid someone $700 in 2024, you send them a 1099 for 2024. If you pay them $400 in 2025, you do not send a 1099 for 2025 because they did not cross $600 that year.

When and how to send the 1099

You must send the 1099 to the recipient by January 31 of the year after you made the payment. If you paid someone in December 2024, you send them the 1099 by January 31, 2025. You send it to their address — usually their home address or business address, whichever they gave you.

The form itself is called a 1099-NEC (for non-employee compensation) or 1099-MISC (for miscellaneous income), depending on what you paid for. Most contractor payments use 1099-NEC. You can get the form from the IRS website, from tax software, or from an accountant. Fill in your information, the recipient's information, and the total amount you paid them.

You also file a copy with the IRS by January 31. Many people use tax software or hire an accountant to handle this, because the IRS filing has specific formatting rules. If you file on paper, you send it to the IRS address listed in the form instructions — it varies by state.

What information you need to fill out a 1099

To fill out a 1099, you need the recipient's name, address, and tax ID. The tax ID is usually their Social Security number if they are self-employed, or their Employer Identification Number (EIN) if they are a business. You should ask for this information when you hire someone or start working with a vendor — do not wait until January to track it down.

You also need the total amount you paid them during the calendar year. Keep records as you go: save invoices, receipts, or a straightforward spreadsheet with dates and amounts. If you wait until December to add it all up, you might miss payments or get the total wrong.

Finally, you need to know what you paid for — services, rent, royalties, or something else — because different types of income go in different boxes on the form. If you paid someone for consulting work, that is non-employee compensation. If you paid for use of their property, that might be rent. The category affects which form you use and which box the amount goes in.

Common mistakes to avoid

The most common mistake is sending a 1099 to an employee instead of a W-2. If someone worked for you on a regular schedule, you controlled their hours and work methods, and you withheld taxes from their pay, they are an employee. Do not send them a 1099.

Another mistake is missing the $600 threshold. If you paid someone $599 total, you do not send a 1099. If you paid them $600.01, you do. Keep track as the year goes on so you know who crosses the line.

A third mistake is sending a 1099 late or to the wrong address. The recipient needs it by January 31 to file their own taxes on time. If you send it in March, they may have already filed and will have to amend. Get the correct mailing address from them upfront.

Finally, do not send a 1099 to a corporation for services. Corporations are taxed differently and do not receive 1099s for service payments. If you are not sure whether the vendor is a corporation, ask them directly.

Keeping records for your own tax filing

You keep a copy of every 1099 you send out. This becomes part of your business records and supports your tax return. If the IRS ever questions a deduction or a payment you made, you can show the 1099 as proof.

Store these copies in a folder or file, organized by year and by recipient. You do not have to send them to the IRS with your tax return — the IRS gets their own copy directly — but you need them for your records. Keep them for at least three years, though seven years is safer.

When you file your own business tax return, you will report the total of all 1099 payments you made as business expenses. The 1099 copies help you remember who you paid and how much.

Frequently Asked Questions

What if I paid someone in cash and do not have their tax ID?

You still need to send a 1099 if the total was over $600. Ask the person for their Social Security number or EIN before January 31. If they refuse to give it to you, you can file the 1099 with their name and address but leave the tax ID blank — mark it as "refused" — and the IRS will follow up with them. Do not skip sending the 1099 because you do not have the ID.

Do I send a 1099 to a business owner or just to employees?

If you paid a business owner (a sole proprietor or LLC) for services and the total was over $600, you send them a 1099. If you paid a corporation for services, you do not send a 1099. If you paid an employee of a business, you do not send a 1099 — that business sends them a W-2. The person who actually received the money is who gets the 1099.

What happens if I do not send a 1099 when I should have?

The IRS may penalize you if you fail to send a required 1099. The penalty starts at $50 per form if you file late, and goes higher if you do not file at all. More importantly, if the recipient does not receive a 1099 and does not report the income, the IRS may come looking for records from you. Send the 1099 on time to avoid problems.

Can I send a 1099 to someone I paid less than $600?

Yes, you can send a 1099 even if the total was under $600 — it is optional. Some people do this to keep clear records or to be extra cautious. The requirement only kicks in at $600, but sending one below that threshold does not hurt.

Do I need to send a 1099 for payments to a contractor outside the United States?

The rules are more complex for foreign contractors. You may need to withhold taxes and file different forms depending on the contractor's country and visa status. Consult a tax professional or the IRS website for guidance on your specific situation.