Does a Partnership Get a 1099? Forms, Deadlines, and Penalties

Yes. If your business pays a partnership $600 or more during the year, you generally need to issue a Form 1099. Partnerships do not get a 1099 exemption the way corporations do, and that includes LLCs that are taxed as partnerships. The corporate exemption gets so much airtime that many payers assume it stretches to cover partnerships too. It doesn’t, and each missed form carries its own penalty.¹

Why the Corporate Exemption Doesn’t Reach Partnerships

The IRS exempts most payments to corporations from 1099 reporting. That exemption covers C corporations, S corporations, and LLCs that have elected to be taxed as either.² Partnerships are specifically outside it. The IRS general instructions state the rule plainly and use an architectural firm organized as a partnership as their example: pay it $600 or more, and a 1099 is required.¹

The confusion usually starts with Form 1065. Partnerships file their own return and pass income to their partners on Schedule K-1, which leads some payers to assume the 1099 would just duplicate that reporting.³ It doesn’t. The K-1 shows how the partnership’s income flows out to its partners. The 1099 shows that you paid money into the partnership in the first place. The IRS uses both.

The same rule applies to LLCs taxed as partnerships. If a vendor’s W-9 shows an LLC with a “P” in the tax classification line, treat it as a partnership and issue the 1099 when the threshold is met.²

Which 1099 Form to Send

The form depends on what you paid for, not on the fact that the recipient is a partnership.

Use Form 1099-NEC for nonemployee compensation of $600 or more. That covers services performed by the partnership — consulting, design, IT work, subcontracting, and similar.⁴ Legal fees of $600 or more paid to a law firm also go on 1099-NEC, regardless of how the firm is organized.²

Use Form 1099-MISC for other reportable categories: rent of $600 or more, royalties of $10 or more, medical and healthcare payments of $600 or more, and gross proceeds paid to an attorney such as settlement funds (as opposed to the attorney’s own fee).⁴ The 1099-MISC also covers payments from notional principal contracts and substitute payments in lieu of dividends or interest.²

When You Don’t Have to Send a 1099 to a Partnership

Two situations remove the requirement.

The first is payment method. If you paid the partnership by credit card, debit card, or a third-party payment network such as PayPal or Venmo for Business, you do not file a 1099-NEC or 1099-MISC for that transaction. The payment processor handles reporting through Form 1099-K, and the IRS explicitly prohibits double-reporting the same transaction on both forms.⁵ The 1099-K threshold is now $20,000 and more than 200 transactions after legislation reinstated the pre-2022 level.⁶ Even if the partnership never receives a 1099-K because it falls under that threshold, you still don’t file a 1099-NEC for card payments. The exemption tracks the payment method, not whether the processor actually issues a form.

The second is distributions a partnership makes to its own partners. Those are reported on Schedule K-1, not on a 1099.¹ This distinction matters if you happen to be both a client of one partnership and a partner in another. The role you’re in determines which form applies.

Confirm the Entity Type With a W-9

You can’t tell from a vendor name whether you’re paying a partnership, a corporation, or an LLC that could be either. Collect a Form W-9 before the first payment.⁷ The vendor checks a box for entity type. An LLC will also fill in a classification letter: “P” for partnership means you owe a 1099 when the threshold is met; “C” or “S” means the corporate exemption applies (with the usual overrides for legal fees, medical payments, and a few other categories). The W-9 also gives you the Taxpayer Identification Number you need to complete the form.

The IRS TIN Matching service lets registered payers verify name-and-TIN combinations before filing and can catch errors that would otherwise surface as notices months later.⁸

If the Partnership Won’t Return a W-9

If a partnership refuses to complete a W-9 or gives you a TIN that doesn’t match IRS records, you’re required to begin backup withholding at a flat 24% on all future payments. That withheld amount is remitted to the IRS on Form 945, the annual return for withheld federal income tax on nonpayroll payments.⁹ Most vendors produce a W-9 quickly once they hear the alternative.

You must also file a 1099-NEC for any payee from whom you withheld under the backup withholding rules, even if the total paid was under $600.⁴

Filing Deadlines

The 1099-NEC has a single deadline of January 31 for both the copy furnished to the recipient and the copy filed with the IRS, whether you file on paper or electronically.²

The 1099-MISC splits its deadlines. Recipient copies are due January 31 for most payment types, or February 15 for statements reporting gross proceeds paid to attorneys and certain broker transactions. The IRS filing deadline is February 28 on paper and March 31 electronically.¹⁰ Any deadline that lands on a weekend or legal holiday moves to the next business day.

Businesses filing 10 or more information returns of any type in a year must file electronically.¹¹ The IRS offers a free portal, IRIS, that handles up to 100 returns at a time by manual entry or CSV upload.¹²

Penalties for Skipping the Form

Penalties are assessed per return and escalate the longer the correction takes. For returns due in 2026:¹³

$60 per return if corrected within 30 days of the due date
$130 per return if corrected after 30 days but by August 1
$340 per return if corrected after August 1 or never filed
$680 per return, or 10% of the amount that should have been reported (whichever is greater), for intentional disregard, with no annual cap

These penalties apply separately to the return filed with the IRS and the statement furnished to the recipient. Failing on both sides for the same payee means two penalties, not one. Annual caps are lower for small businesses (those averaging $5 million or less in gross receipts) than for larger ones; the intentional disregard tier has no cap for any size of business.¹³

If you realize partway through the year that you’ve been paying a partnership without a W-9 on file, request one immediately, start backup withholding if the vendor won’t cooperate, and get the 1099 filed as soon as you can. A late form costs less than a missing one.

1
Internal Revenue Service. General Instructions for Certain Information Returns
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. Instructions for Form 1065 – US Return of Partnership Income
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Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
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Internal Revenue Service. Form 1099-K FAQs: Third Party Filers of Form 1099-K
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One Big Beautiful Bill
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Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification
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Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
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Internal Revenue Service. Instructions for the Requester of Form W-9
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Internal Revenue Service. 2026 Publication 1099 General Instructions for Certain Information Returns
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Internal Revenue Service. E-file Information Returns
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Internal Revenue Service. E-file Information Returns With IRIS
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Internal Revenue Service. Information Return Penalties