Who Must File a 1099 Form With the IRS

The IRS requires you to file a 1099 if you paid someone at least $600 for services during the tax year and that person is not your employee

The $600 threshold applies to most common 1099 situations — payments to contractors, freelancers, consultants, and other service providers. If you paid less than $600 to any single person for services, you do not file a 1099 for that payment. The threshold is per person, per year, so if you paid one contractor $400 and another $300, neither triggers a filing requirement.

The key distinction is whether the person is your employee. If you withhold taxes, Social Security, and Medicare from their paychecks and issue them a W-2 at year-end, you do not file a 1099 for them. If you straightforward paid them for work without withholding, a 1099 is required once the $600 threshold is met.

Different types of 1099 forms exist for different payment categories — 1099-NEC for non-employee compensation, 1099-MISC for miscellaneous income, 1099-INT for interest, 1099-DIV for dividends. The form you file depends on what you paid for, not who you paid.

Key Takeaways

• You file a 1099 when you pay a non-employee at least $600 in a calendar year for services or other reportable income.
• The $600 threshold is per person per year, so multiple smaller payments to the same person add up toward the requirement.
• Payments to your employees (people for whom you withhold taxes) do not get a 1099; they get a W-2 instead.
• You must file the 1099 with the IRS and send a copy to the recipient by January 31 of the following year.
• Certain payments — like rent to a landlord or payments to corporations — have different rules and may not require a 1099.

Payments that do not require a 1099

Not every payment over $600 triggers a 1099 filing. Payments to corporations generally do not require a 1099-NEC, even if they exceed $600. If you paid a plumbing company or a consulting firm (structured as a corporation), you typically do not file a 1099 for that payment. Payments to sole proprietors and partnerships do require a 1099 if the threshold is met.

Rent paid to a landlord does not require a 1099-NEC, even if it exceeds $600. Rent is reported on a different form — the 1099-MISC — and only if you are in the business of renting property and the landlord is an individual. Casual landlords and most residential rental situations do not trigger a 1099 requirement.

Payments for goods (as opposed to services) do not require a 1099. If you bought $2,000 worth of office supplies from a vendor, no 1099 is filed. The 1099 requirement applies to services, rent, royalties, and certain other types of income, not to purchases of tangible items.

How to track payments and identify who needs a 1099

Keep records of every payment you make to non-employees throughout the year. A straightforward spreadsheet with the payee's name, address, tax ID (usually their Social Security number or EIN), and the amount paid works well. At year-end, add up all payments to each person to see who crossed the $600 threshold.

Ask for a W-9 form from anyone you plan to pay $600 or more. The W-9 collects their name, address, and tax ID — the information you need to file a 1099. If someone refuses to provide a W-9, you may be required to withhold 24% of their payment as backup withholding and send it to the IRS, though this is uncommon in practice.

If you do not have a tax ID for someone, ask them directly. For U.S. citizens and residents, this is their Social Security number. For non-residents or certain business entities, it is an Employer Identification Number (EIN). Without this information, you cannot file an accurate 1099.

When to file and where to send the forms

You file 1099s with the IRS by January 31 of the year following the payment. If January 31 falls on a weekend or holiday, the important date moves to the next business day. You also send a copy to the recipient by the same date — they need it to file their own tax return.

The IRS accepts 1099s filed electronically through the Filing Information Returns Electronically (FIRE) system or on paper using the official IRS forms. Most tax software and payroll providers can generate and file 1099s for you, which is simpler than doing it by hand. If you file on paper, you must use the official IRS 1099 forms and follow the exact formatting requirements.

You keep a copy for your records. The IRS matches the 1099s you file with the 1099s the recipients report on their tax returns, so accuracy matters. If you file a 1099 with the wrong amount or the wrong tax ID, the IRS may contact you or the recipient.

Special situations: contractors in different states and foreign payments

If you paid a contractor who lives in another state, the same $600 federal threshold applies. Some states have their own 1099 filing requirements that differ from the federal rule — a few states require filing at lower thresholds or for different types of payments. Check your state's tax authority website if you work with contractors in multiple states.

Payments to foreign nationals who are not U.S. residents have different rules. Generally, you do not file a 1099-NEC for payments to a non-resident alien. However, you may need to withhold taxes on the payment and file a different form (Form 1042-S) depending on the type of income and the person's visa status. If you regularly pay foreign contractors, consult a tax professional about your specific obligations.

What happens if you do not file a required 1099

If you fail to file a 1099 that you were required to file, the IRS can assess a penalty. The penalty amount depends on how late you file: $50 per form if you file within 30 days of the important date, $100 per form if you file more than 30 days late (up to a maximum of $1,630,000 per year for large filers). If you intentionally do not file, the penalty can be higher.

The recipient may also face problems. If they do not receive a 1099 from you but the IRS has a record that you paid them, they may face questions about unreported income. This can trigger an audit or a notice from the IRS asking them to explain the discrepancy.

If you discover you missed filing a 1099, you can file it late. The penalty is reduced if you file within 30 days of discovering the error. Contact the IRS or use the FIRE system to submit the corrected or late 1099.

Frequently Asked Questions

Do I file a 1099 if I paid someone $600 exactly?

Yes. The threshold is $600 or more, so a payment of exactly $600 requires a 1099. If the total payments to one person during the year add up to $600 or more, you file a 1099 for that person.

What if I paid someone $599 total — do I still need their tax ID?

You do not need to file a 1099, but it is still good practice to collect a W-9 and keep records. If you pay the same person again in a future year and the combined total crosses $600, you will have their information ready.

Do I file a 1099 for payments made by credit card or PayPal?

Credit card processors and payment platforms like PayPal file their own 1099-Ks based on transactions they process. You still file a 1099-NEC if you paid a non-employee $600 or more, even if the payment went through a third party. Do not double-report — if the processor already filed a 1099-K, you may not need to file a separate 1099-NEC for the same payment.

Can I file a 1099 for someone who did not give me their tax ID?

You should not file without a tax ID. If someone refuses to provide one, ask again and explain that you cannot pay them without it. If they still refuse, you may need to withhold 24% of their payment as backup withholding and send it to the IRS. Document the refusal in case the IRS asks questions later.

What if the person I paid says they did not receive their copy of the 1099?

You are required to send it by January 31, but if it was lost in the mail, you can send a duplicate. Keep proof that you mailed the original (a dated envelope or certified mail receipt). If the recipient never received it and did not report the income, they may face IRS notices — they can contact the IRS to request a copy from you.