You have to send a 1099 to an LLC when the LLC is taxed as a disregarded entity or partnership and you paid it $2,000 or more for services in the course of your business during the year. If the LLC has elected to be taxed as an S corporation or C corporation, you generally do not. The “LLC” label on the door tells you nothing on its own; the tax classification the LLC checked on its W-9 is what controls.
What Decides It: The LLC’s Federal Tax Classification
The IRS doesn’t treat “LLC” as a tax status. An LLC is a state-law entity that picks one of four federal tax identities, and each one produces a different answer.
Single-Member LLC (Disregarded Entity)
A single-owner LLC that hasn’t elected corporate treatment is invisible to the IRS and taxed as a sole proprietorship. File a 1099-NEC using the individual owner’s name and SSN or ITIN, not the LLC’s name or EIN.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Section: Specific Instructions for Form 1099-NEC This is the detail most payers get wrong. The W-9 will tell you exactly whose name and number belong on the form.
Multi-Member LLC (Partnership)
An LLC with two or more members that hasn’t elected corporate status defaults to partnership taxation. File a 1099-NEC using the LLC’s legal name and its EIN.2Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025)
LLC Taxed as an S Corporation or C Corporation
If the LLC has elected S corp or C corp treatment, the corporate exemption applies and no 1099-NEC is required for ordinary service payments.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025) – Section: Exceptions That’s true even though S corporations are pass-through entities for income tax.
The short version:
- Disregarded entity: file 1099-NEC using owner’s name and SSN or ITIN
- Partnership: file 1099-NEC using LLC’s name and EIN
- S corporation: generally exempt
- C corporation: generally exempt
The $2,000 Threshold and What Payments Count
Starting with tax year 2026, the reporting trigger for nonemployee compensation is $2,000, up from the old $600 floor. Congress raised it effective for tax years beginning after 2025, with inflation adjustments starting in 2027.4Office of the Law Revision Counsel. 26 USC 6041 – Information at Source The $2,000 is the aggregate you paid a given LLC over the whole calendar year, not per invoice or per project.5Internal Revenue Service. 2026 Publication 1099 General Instructions for Certain Information Returns
The threshold only applies to payments made in the course of your trade or business. Hiring a freelance designer for personal work on your house doesn’t generate a 1099 obligation no matter what you paid. If your business pays that same designer $2,000 or more for commercial work, the obligation kicks in unless an exception applies.6Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
Two Exceptions That Override Corporate Status
Even a corporate LLC gets a 1099 in two situations:
- Legal fees. Payments of $2,000 or more to any attorney or law firm go on Form 1099-NEC (Box 1), even if the firm is a corporation. Gross proceeds paid to an attorney in a settlement go separately on Form 1099-MISC (Box 10).
- Medical and health care payments. Payments to corporations that provide medical or health care services go on Form 1099-MISC (Box 6).7Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025) – Section: Reportable Payments to Corporations
A law firm organized as a corporate LLC still gets a 1099. So does an incorporated medical practice. These are the carve-outs that catch payers off guard.
The W-9 Is How You Know
You cannot tell an LLC’s tax classification from its name, its state paperwork, or its website. Request a Form W-9 from every LLC you pay, ideally before the first payment goes out. Line 3a of the form asks the LLC to check a box: disregarded entity, partnership, or LLC taxed as a C, S, or other corporation.8Internal Revenue Service. Instructions for the Requester of Form W-9 (Rev. January 2026) That box is your answer.
The name and TIN on the W-9 must match IRS records. A mismatch triggers a B-Notice demanding a corrected W-9. The IRS TIN Matching service is a free pre-filing tool that lets you validate name-and-TIN combinations before you file.9Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
If the LLC Won’t Give You a W-9
When an LLC refuses to provide a W-9, gives you an incorrect TIN, or ignores your request, you’re required to withhold 24% of every payment and send it to the IRS as backup withholding. This continues until the LLC provides a valid W-9.10Internal Revenue Service. Backup Withholding Mentioning the 24% withholding tends to produce the missing form quickly. Building the W-9 request into vendor onboarding is easier than chasing it at year-end.
Payments by Card or Third-Party App Don’t Count
If you paid the LLC by credit card, debit card, or through a third-party network like PayPal or Venmo Business, you do not report those payments on a 1099-NEC. The payment processor reports them on Form 1099-K.11Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025) – Section: Form 1099-K The 1099-K threshold for 2026 is $20,000 in gross payments and more than 200 transactions, which Congress reverted to after years of proposed changes to a $600 floor.12Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
In practice, if you paid a consultant’s LLC $5,000 through PayPal, no 1099-NEC is owed from you. If you paid the same LLC $3,000 by check and $5,000 through PayPal, you report only the $3,000 check payment (assuming the LLC is a disregarded entity or partnership). Mixed payment methods have to be tracked channel by channel.
What About Rent to an LLC?
Rent is different. Payments to an LLC landlord for office space, equipment, or other business property go on Form 1099-MISC, Box 1, not 1099-NEC. The $2,000 threshold and the corporate exemption both work the same way.13Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Section: Box 1 Rents If you pay rent to a property management company rather than the owner, you report to the management company and it handles reporting downstream.
Filing Basics if You Owe a 1099
Report total nonemployee compensation for the year in Box 1 of Form 1099-NEC. This includes fees, commissions, and other service compensation. Federal tax you withheld (such as backup withholding) goes in Box 4.14Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Section: Box 1 Nonemployee Compensation Use the identifying information matching the LLC’s classification: owner’s name and SSN or ITIN for a disregarded entity; LLC’s name and EIN for a partnership.
Both Copy B (to the LLC) and Copy A (to the IRS) are due January 31 of the year following payment, whether you file electronically or on paper. There is no automatic extension.15Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Section: When To File
If you file 10 or more information returns of any type during the year, you must file them electronically.16Internal Revenue Service. Topic No. 801 – Who Must File Information Returns Electronically Paper filers must use the official pre-printed, scannable 1099-NEC (not a printout from the IRS website) and include Form 1096 as a transmittal summary.17Internal Revenue Service. About Form 1096, Annual Summary and Transmittal of U.S. Information Returns
What It Costs to Skip It
Penalties apply separately to failing to file with the IRS and failing to furnish the statement to the payee, so you can be hit twice on the same form. The 2026 amounts scale with lateness:18Internal Revenue Service. Information Return Penalties
- Up to 30 days late: $60 per form
- 31 days late through August 1: $130 per form
- After August 1 or never filed: $340 per form
- Intentional disregard: $680 per form, no maximum cap
“Intentional disregard” doesn’t require bad intent. Knowingly ignoring the requirement is enough. Skipping 1099s for 50 LLCs could produce $34,000 in penalties per violation type before the IRS looks at any underlying tax.
Quick Checklist Before You Decide
- Was the payment for services in your trade or business? If no, no 1099.
- Did you pay $2,000 or more to that LLC during the calendar year? If no, no 1099.
- Did you pay by credit card, debit card, or a third-party network? If yes, the processor reports it, not you.
- Which box did the LLC check on its W-9? If S corp or C corp, no 1099-NEC (unless the work was legal or medical). If disregarded entity or partnership, file the 1099-NEC.
Get the W-9 before the first check clears. Every other question about whether an LLC gets a 1099 flows from that one form.