Forms. Documents. Papers. Whatever you might call them, these sometimes printed, sometimes digital collections of numbers and information often hold some of the most crucial information we need, both as individuals and as businesses, in order to perform some of the most important tasks. Filing your taxes, whether as an individual or on behalf of your business, involves a lot of forms, forms that, no matter how hard you try, can be hard to keep track of. You may think you have a solid understanding of all the different forms you need to file, as well as the ones you need to distribute to others, and then suddenly someone will ask you a question about a form you’ve never heard of before that needs to be submitted that day. A stressful situation, indeed.
At Payday HCM, we’re very familiar with the overwhelming nature of tax season. We have clients ask us questions on all the necessary policies and forms that go into accurate tax filing. We’ve found that, even with the nearly endless stream of information available to us, it can still be difficult for business owners to find the information they need when they need it. This can be especially frustrating when it comes to things like 1099s, where businesses need to know who to send them to and when to send them by.
That’s why, in this article, we’ll be going over three of the most common questions we see when it comes to Form 1099. For this article, we’ll be focusing on three main questions:
Within these three questions, we’ll break down everything business owners and individuals need to know about 1099s, including the types of 1099s, reporting deadlines, reporting requirements, and filing deadlines.
What Is A 1099?
First and foremost, arguably the most important question—we’ll start with going over what a Form 1099 is, as well as the different types.
What Is a 1099 Form?
Generally speaking, a Form 1099, like a Form W-2, is an information return filed to report tax withholding each year. Now, unlike Form W-2, which is distributed to employees of a business to report any wages or tips and the taxes withheld therein, a Form 1099 is used to reflect other payments made by a business that are still subject to tax withholding.
There are a few different instances in which a Form 1099 would be used. Businesses use Form 1099 to report any taxes withheld under any of the backup withholding rules (taxes withheld on future payments either due to an incorrect taxpayer identification number or from a failure to report earned interest payments) or any royalty payments (payments made to a party for use of an owned intellectual property).
Most popularly, though, a Form 1099 is used to report payments made to an individual or vendor who is not an employee of your business. These payments are made in the course of business for services rendered by those who are not formally employees of your business.
Types of 1099s
When we talk about Form 1099, saying “Form 1099” is slightly misleading, as Form 1099 refers more accurately to a group of forms that are all 1099s. These include:
- 1099-NEC: nonemployee compensation (e.g., independent contractor payments).
- 1099-MISC: miscellaneous payments like rent, royalties, or other income.
- 1099-INT, 1099-DIV: interest and dividend income.
- 1099-K: payments processed through third-party networks (e.g., payment cards or apps).
- 1099-R: retirement distributions.
For businesses, Form 1099-NEC is the most common form that you will interact with, as this is the type of 1099 that you will need to provide any contractors or vendors with whom you’ve paid for services throughout the year.
Who Should Receive a 1099?
Next, we’ll go into more detail on who businesses should be providing 1099s to, including payment thresholds and requirements.
Independent Contractors & Non-Employees
As mentioned above, Form 1099, specifically Form 1099-NEC, is distributed for any nonemployee compensation. So, if your business pays a non-employee—such as a freelancer, consultant, or contractor—for services, you generally must issue a 1099-NEC. Again, the key here is that the individual is not a formal employee of your company.
Now, it isn’t as simple as distributing a Form 1099-NEC to any and all parties you did business with over the course of the year. These contractors or vendors still need to meet certain payment thresholds: for payments of $600 or more made prior to December 31, 2025, you’ll need to provide a 1099. For payments made after December 31, 2025, this threshold was raised to $2,000.
Other Types of Form 1099 Recipients
Other payments may require different 1099 forms. These include rent, royalties, or other miscellaneous income, which might require a 1099-MISC, or Form 1099-G for individuals who received any unemployment benefits or a state or local tax refund. Form 1099-K is another commonly distributed type of Form 1099. Form 1099-K reports credit-card payments that are made through online payment platforms such as PayPal.
Form 1099-Ks are distributed for payments related to the sale of goods or services and include things like rideshare or delivery apps. It’s important to note that a payment app is only required to report payments that exceed $20,000 from 200 or more transactions (but you still can receive a Form 1099-K for lesser amounts).
Do S-Corps Get 1099s?
It is important to look at different tax structures when going over the reporting requirements for Form 1099. This includes S-Corps, sole proprietorships, partnerships, or C-Corps. These structures will affect whether or not you need to distribute a Form 1099 to certain businesses or whether your business will receive 1099s for certain transactions.
Generally, most tax structures, including limited liability companies (LLCs), sole proprietorships, and partnerships, will receive a Form 1099 in cases where the other transaction requirements are met. S-Corps, however, often will not receive a Form 1099 for services provided, since S-Corps are pass-through entities. However, if an S-Corp paid another contractor or nonemployee for services of $600 or more, the S-Corp must provide that contractor with a Form 1099.
When Is a 1099 Required?
Now, we’ll go over the requirements for Forms 1099, including payment thresholds and deadlines for distribution.
Form 1099 Payment Thresholds
As mentioned above, any payments of $600 or more made in exchange for services in the course of doing business should be reported with a Form 1099-NEC. This requirement doesn’t mean that payments less than $600 can’t be reported with a 1099, only that payments of $600 or more are required to be reported with a Form 1099-NEC.
However, with the passage of the “One Big Beautiful Bill Act” in July 2025, these reporting requirements are set to change heading into 2026. Any payments made before December 31, 2025, should still follow the $600 reporting threshold, but any payments made after this date should follow the new $2,000 reporting threshold.
Form 1099 Timing and Deadlines
Businesses that made payments to contractors or nonemployees over the course of the year are responsible for distributing Form 1099s. The IRS requires businesses to send most 1099 forms by January 31 of the year following the payment, meaning any 1099s must be furnished to the service provider by January 31, 2026.
For Form 1099-NEC, these forms must be sent to both the IRS and the service provider by January 31 of the year following payment (if this day falls on a weekend, it is pushed to the next business day). This is the same regardless of whether you file electronically or by paper. Form 1099-MISC must be sent to the recipient by February 1 and filed by February 28 (or March 31 if filing electronically).
This Tax Season, Leave No Question Unanswered
Even in the age of unlimited information, getting the answers to your questions is sometimes easier said than done. This can be especially true around tax season, when business owners are looking for quick answers to important questions that might make or break whether or not their taxes get filed correctly and on time. This is especially crucial when it comes to the distribution of tax forms like W-2s or 1099s, where other individuals or businesses are relying on a business’s accurate reporting in order for them to file their own tax returns. Luckily, with the information provided in this article, you’ll have the knowledge you need to ensure you don’t miss a beat (or a form) this tax season.
Tax season can be overwhelming, especially for business owners. Not only do you need to worry about ensuring your business’s taxes are filed correctly and on time, but you also need to distribute W-2s to your employees, ensure compliance with things like the Affordable Care Act, and continue to perform the day-to-day tasks that keep your business running. It’s a lot to keep track of, and it’s easy for some things to slip through the cracks. Check out our article for a full breakdown of employer taxes to ensure you’re staying on top of everything this tax season.
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