Do I Need to Send a 1099 to an LLC: Rules, W-9, Deadlines

Whether you need to send a 1099 to an LLC depends on how that LLC is taxed. If the LLC is a disregarded entity (single-member) or is taxed as a partnership, you must issue a Form 1099-NEC when you pay it $600 or more for services in the course of your trade or business. If the LLC has elected to be taxed as an S-corporation or C-corporation, you generally don’t have to, with a few important exceptions like legal and medical payments. The only reliable way to know which category an LLC falls into is to collect a Form W-9 before you pay.

When the 1099 Obligation Applies at All

The reporting rule kicks in when your business pays a non-employee $600 or more during the calendar year for services performed in the course of your trade or business.¹ Trade or business is the key phrase. Pay a landscaper to mow your home lawn or a freelancer to build your personal website, and no 1099 is required no matter what you spent. The obligation attaches only to payments tied to running a business, and it also applies to nonprofits and government agencies.²

Payments for services go on Form 1099-NEC.³ Rent, royalties, and medical or health care payments go on Form 1099-MISC.⁴ The $600 threshold applies to both for most payment categories.

The largest built-in exception is for corporations. Payments to incorporated businesses generally don’t require a 1099 because corporations already face their own reporting rules.¹ That exemption is precisely what makes LLCs tricky.

How the LLC’s Tax Classification Decides It

An LLC is a state-law entity, and the IRS has no separate tax box for it. Instead, every LLC either elects or defaults into one of four federal classifications, and the classification tells you whether a 1099 is owed.

Single-Member LLC (Disregarded Entity)

A single-member LLC that hasn’t filed any election with the IRS is a disregarded entity, meaning the IRS treats the income as belonging directly to the owner.⁵ Because the LLC is invisible for tax purposes, it gets no corporate exemption. Pay it $600 or more for services and you issue a 1099-NEC.

Multi-Member LLC (Partnership)

A multi-member LLC that hasn’t elected corporate status is automatically taxed as a partnership. Partnerships receive no corporate exemption either, so the $600-and-up payment for services requires a 1099-NEC.²

LLC Taxed as S-Corp or C-Corp

An LLC can elect corporate tax status by filing Form 8832, and can additionally elect S-corporation treatment by filing Form 2553.⁶ Once either election is in effect, the LLC is treated as a corporation for information-reporting purposes, and the corporate exemption applies. You generally do not send a 1099-NEC to an LLC taxed as an S-corp or C-corp.

This is where most payers get tripped up. The letters “LLC” on an invoice tell you nothing about the entity’s tax treatment. You can’t guess, and you can’t tell from the business name.

Use Form W-9 to Find Out

The only reliable way to learn an LLC’s tax classification is to request a completed Form W-9 before the first payment. On line 3a, the LLC checks “Limited liability company” and writes a letter code showing its tax treatment: C for C-corporation, S for S-corporation, or P for partnership.⁷ A single-member disregarded entity typically supplies the owner’s information directly, since the LLC itself is ignored for tax purposes.

C or S on the form means no 1099 in most cases. P, or an owner’s information supplied for a disregarded entity, means you file a 1099 once payments hit $600. The W-9 also gives you the TIN or EIN you need to prepare the form.

If a vendor refuses to hand over a W-9 or provides an incorrect TIN, you’re required to withhold 24% of each payment as backup withholding and remit it to the IRS.⁸ Collecting a correct W-9 up front avoids that headache and the follow-up B-Notice the IRS sends when a filed 1099’s name and TIN don’t match its records.

Payments That Require a 1099 No Matter What

A few categories of payments override the corporate exemption. Even when the LLC is an S-corp or C-corp, you still owe a 1099 for these:

Payments of $600 or more to an attorney or law firm for legal services go on a 1099-NEC, regardless of the firm’s entity structure.²
Payments of $600 or more to physicians, hospitals, or medical corporations for health care services go on Form 1099-MISC, even when the provider is incorporated.²
Cash payments of $600 or more for fish bought from anyone in the commercial fishing trade go on Form 1099-MISC.⁴

The attorney rule catches the most people off guard. Pay a law firm $5,000 for contract review, learn from its W-9 that it’s a C-corp LLC, and you still owe a 1099-NEC.

Payments by Credit Card or Payment App Don’t Count

If you pay an LLC through a credit card, debit card, or a third-party payment network like PayPal or Venmo, you do not issue a 1099-NEC or 1099-MISC for that payment. The payment processor is responsible for reporting those transactions on Form 1099-K. Putting the same payment on both forms would double-count the income.

Under the reinstated threshold, payment settlement entities file a 1099-K only when payments to a single payee exceed $20,000 and more than 200 transactions occur during the year.⁹ That’s the processor’s problem, not yours. Your job is to leave card and payment-app transactions off the 1099-NEC.

If you pay the same LLC partly by check and partly by credit card, only the check portion counts toward your $600 threshold. Track the payment method for each transaction so you can separate them at year-end.

Filing Deadlines

The two forms don’t share the same schedule:

Form 1099-NEC is due to both the recipient and the IRS by January 31.²
Form 1099-MISC is due to the recipient by January 31, to the IRS by February 28 on paper, or March 31 if you file electronically.²

Deadlines falling on a weekend or legal holiday shift to the next business day. If you file 10 or more information returns of any type during the year, you must file them electronically; that count is aggregated across all return types.¹⁰ The IRS’s free IRIS portal handles up to 100 returns at a time through manual entry or CSV upload.¹¹

What It Costs to Get It Wrong

Failing to file a correct 1099 by the deadline triggers penalties under IRC Section 6721, with a parallel penalty under Section 6722 for failing to furnish a correct statement to the recipient. Amounts adjust for inflation annually. For returns required to be filed in 2026, the tiers for small businesses (those averaging $5 million or less in gross receipts) are:¹²

Corrected within 30 days: $60 per return, up to $239,000.
Corrected after 30 days but by August 1: $130 per return, up to $683,000.
Not corrected by August 1: $340 per return, up to $1,366,000.
Intentional disregard: $680 per return or 10% of the amount that should have been reported, whichever is greater, with no annual cap.

Larger businesses face the same per-return amounts but higher annual caps of $683,000, $2,049,000, and $4,098,500 respectively.¹² Catching a mistake and correcting it within 30 days is by far the cheapest outcome, which is another reason to collect W-9s up front instead of chasing them in January.

1
Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. About Form 1099-NEC, Nonemployee Compensation
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Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
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Internal Revenue Service. Single Member Limited Liability Companies
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Internal Revenue Service. About Form 8832, Entity Classification Election
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Internal Revenue Service. Instructions for the Requester of Form W-9
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Internal Revenue Service. Backup Withholding
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold
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Internal Revenue Service. Publication 1099, General Instructions for Certain Information Returns (2026)
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Internal Revenue Service. E-File Information Returns With IRIS
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Internal Revenue Service. Revenue Procedure 2024-40