Do I Need to Issue a 1099 to My Property Management Company?

If you paid your property management company $2,000 or more in fees during 2026, you generally do need to issue a 1099-NEC — unless the company is taxed as a C-corporation or S-corporation. So the answer to whether you need to issue a 1099 to your property management company depends on two things: how much you paid in management fees for the year, and how the company is structured for tax purposes.¹

The $2,000 Threshold for 2026 Payments

For payments made after December 31, 2025, the reporting threshold for nonemployee compensation on Form 1099-NEC is $2,000. It used to be $600. The IRS will begin adjusting the $2,000 figure for inflation starting in 2027.¹

If your total management fees for the calendar year are under $2,000, you have no federal filing obligation for that payee, regardless of entity type. Older guides and some tax software still cite the $600 figure; that number is out of date for 2026 payments.²

The Corporate Exemption

Even when you pay far more than $2,000 in fees, you generally don’t file a 1099-NEC if the management company is a C-corporation or S-corporation. Payments to corporations are exempt from most information return reporting, and that exemption extends to LLCs that have elected to be taxed as a C-corp or S-corp.³ This is why many owners of larger portfolios end up with no 1099 to file for their manager: the bigger firms tend to be incorporated.

You still owe a 1099-NEC when you pay $2,000 or more to a management company organized as a sole proprietorship, a partnership, or an LLC that hasn’t elected corporate tax treatment.⁴ Entity type, not just dollar amount, decides it.

Watch the LLC Boxes

A single-member LLC that hasn’t elected corporate treatment is a disregarded entity, taxed like a sole proprietorship. Payments to it are reportable.⁵ A multi-member LLC defaults to partnership taxation, and partnerships are not exempt either. Only an LLC that has affirmatively elected C-corp or S-corp treatment falls under the corporate exemption.³ If a W-9 shows “LLC” checked without a C or S tax classification specified, treat the payment as reportable.

Get a W-9 Before You Decide

The only clean way to confirm entity type is to request a completed Form W-9 from the management company, ideally before you start paying them. The W-9 gives you the legal name, the Taxpayer Identification Number (an EIN or SSN), and a checkbox showing whether the payee is a sole proprietorship, partnership, C-corp, S-corp, LLC, or something else.⁶ A C-corp or S-corp box gives you the documentation you need to skip filing.

Don’t skip this step. If you never collect a W-9 and it later turns out the company wasn’t a corporation, you’re the one on the hook for the missing return and any penalties that follow. The IRS expects reasonable diligence from the payer. Keep the signed W-9 on file for at least three years after you file the related return.

What Amount Actually Goes on the Form

Only the management fees themselves get reported. The gross rent tenants pay, which the manager collects on your behalf and then remits to you, is your income, not the manager’s compensation. It doesn’t belong on the 1099-NEC.

This is easy to get wrong because the money flowing through a manager’s trust account can be many times larger than what they actually earn. If tenants paid $60,000 in rent and your manager took an 8% fee, the number in Box 1 of the 1099-NEC is $4,800, not $60,000.⁷

Vendor Payments Your Manager Makes for You

There’s a second reporting obligation that catches owners off guard. When your property manager hires a plumber, electrician, landscaper, or handyman and pays them from your rental proceeds, the IRS treats you as the actual payer. The manager is your agent. That means you, not the management company, are responsible for issuing 1099-NECs to any of those individual vendors you paid $2,000 or more during the year.²

When a vendor bills for labor and materials together, report the full amount. Parts bundled with a service are part of the reportable payment.³

To handle this without guessing, ask your management company for a detailed year-end statement listing every vendor they paid on your behalf: payee name, TIN or a note confirming a W-9 is on file, and the total for the year. Some managers issue vendor 1099s as part of their service. Others don’t. Ask up front, and get the answer in writing.

How and When to File

Once you’ve decided a 1099-NEC is required, the mechanics are simple. Copy the legal name, address, and TIN from the W-9 to the 1099-NEC. Your details go in the payer section; the recipient’s go opposite. Put the total fees you paid from January 1 through December 31 in Box 1.⁷ Cross-check Box 1 against your manager’s year-end statement, because mismatches between what you report and what they report on their own return are exactly what triggers IRS notices.

Both copies — Copy A to the IRS and Copy B to the recipient — are due January 31 of the year after payment. There’s no automatic extension for the 1099-NEC.⁷

If you file 10 or more information returns of any kind in a calendar year, combining 1099s, W-2s, and everything else, you have to file electronically. The IRS runs a free online portal called IRIS that accepts up to 100 returns per submission.⁸ Most owners with one or two rentals fall under 10 total and can still file on paper, but a paper submission needs Form 1096 as a transmittal cover sheet.⁹

Penalties for Skipping It

Penalties apply per form and scale with how late you are. For returns due in 2026:¹⁰

Up to 30 days late: $60 per return
31 days late through August 1: $130 per return
After August 1 or never filed: $340 per return
Intentional disregard: $680 per return, with no maximum cap

The same tiered penalties apply separately to failing to file with the IRS and to failing to furnish the recipient copy, so one skipped form can generate two hits. Incorrect information, like a wrong TIN, is penalized the same way. Filing a correction as soon as you catch the mistake keeps you in the lower tier.¹⁰

State Filing Is a Separate Question

Federal filing doesn’t necessarily cover you at the state level. Many states require their own copy of the 1099-NEC, and some participate in the Combined Federal/State Filing Program, which forwards your federal e-filed data to them automatically. Others want a separate direct submission, and a few use thresholds lower than $2,000.¹¹ Check with your state’s tax department before assuming your federal return closes the loop.

1
Internal Revenue Service. Publication 1099 General Instructions for Certain Information Returns – 2026
2
Internal Revenue Service. Form 1099 NEC and Independent Contractors
3
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
4
Internal Revenue Service. Reporting Payments to Independent Contractors
5
Internal Revenue Service. Single Member Limited Liability Companies
6
Internal Revenue Service. Instructions for the Requester of Form W-9
7
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
8
Internal Revenue Service. E-File Information Returns
9
Internal Revenue Service. General Instructions for Certain Information Returns
10
Internal Revenue Service. Information Return Penalties
11
Internal Revenue Service. Combined Federal/State Filing (CFSF) Program State Coordinator Information FAQs