Whether a PLLC gets a 1099 depends on how it’s taxed federally, not on the PLLC label itself. A PLLC taxed as a sole proprietorship or partnership will generally receive Form 1099-NEC from any client paying it $2,000 or more for services in a year. A PLLC taxed as an S corporation or C corporation usually won’t, with two important exceptions: law firms and medical practices receive 1099s no matter which corporate election they’ve made.
Why Your Federal Tax Election Decides It
The IRS does not recognize “PLLC” as a tax category. It treats a professional LLC the same as any other LLC, and what actually controls 1099 reporting is the tax classification the entity has elected or defaulted into. An LLC can be taxed four ways: as a disregarded entity, a partnership, an S corporation, or a C corporation. That single choice determines whether your clients are required to send you a 1099-NEC at year end.
The reason corporate status matters is a longstanding rule: payments to corporations generally don’t require 1099-NEC reporting, because the corporation files its own return and the IRS considers that sufficient to track the income. Payments to sole proprietors and partnerships aren’t covered by that exemption.
What Happens Under Each Tax Classification
Single-Member PLLC Taxed as a Disregarded Entity
A single-member PLLC that has not filed Form 8832 or Form 2553 defaults to disregarded entity status. The IRS treats it as if the entity doesn’t exist separately from you, and all income and expenses flow through to your Schedule C.1Internal Revenue Service. Single Member Limited Liability Companies Any client who pays your PLLC $2,000 or more during the year for services is required to issue you a 1099-NEC.2Internal Revenue Service. Form 1099 NEC and Independent Contractors
Income on Schedule C is also subject to self-employment tax at 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare.3Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Half of that amount is deductible when calculating adjusted gross income.
Multi-Member PLLC Taxed as a Partnership
A PLLC with more than one member that hasn’t elected corporate status defaults to partnership treatment. The partnership files Form 1065 and issues each partner a Schedule K-1 showing their share of income.4Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income Just like a disregarded entity, a partnership-taxed PLLC receives 1099-NECs from clients who pay $2,000 or more for services. There is no broad partnership exemption comparable to the one for corporations.
PLLC Taxed as an S Corporation or C Corporation
Filing Form 2553 elects S corporation status; filing Form 8832 elects C corporation status.5Internal Revenue Service. About Form 2553, Election by a Small Business Corporation Either election generally exempts the PLLC from receiving 1099-NECs. The entity files its own return (Form 1120 for a C corp, Form 1120-S for an S corp), and payers rely on the classification you report to them on Form W-9 to skip the 1099.6Internal Revenue Service. About Form 1120-S, U.S. Income Tax Return for an S Corporation
This is where many PLLCs stop receiving 1099s. It’s also where the two big exceptions come in.
Law Firms and Medical Practices Get 1099s Anyway
The corporate exemption has carve-outs, and the two largest ones catch the professions that form PLLCs most often.
Attorneys
Every payment of $2,000 or more to an attorney for legal services must be reported on Form 1099-NEC, even if the law firm is taxed as an S corp or C corp. Electing corporate status does not stop clients from having to issue the form. Gross proceeds paid to an attorney in connection with legal services, such as settlement funds passing through a lawyer’s trust account, get reported separately on Form 1099-MISC.7Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC – Specific Instructions for Form 1099-NEC
Medical and Healthcare Providers
Payments of $2,000 or more for medical or healthcare services go on Form 1099-MISC (Box 6), not Form 1099-NEC. The corporate exemption does not apply here either. The IRS explicitly requires reporting to corporations, including professional corporations, for payments made for medical or healthcare services.8Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC – Specific Instructions for Form 1099-MISC A medical PLLC should expect 1099-MISC forms from insurance companies and business clients regardless of tax election. The narrow carve-outs are payments to tax-exempt hospitals, government-owned facilities, flexible spending arrangements, and health reimbursement arrangements.
A handful of other categories also require reporting to corporations (substitute payments in lieu of dividends, cash purchases of fish for resale, payments by federal executive agencies, cancellation of debt), but most PLLCs don’t encounter them.9Internal Revenue Service. General Instructions for Certain Information Returns (2025) – Section: Payments to Corporations and Partnerships
The $2,000 Threshold Starting in 2026
The old $600 threshold is gone. Under the One, Big, Beautiful Bill Act (P.L. 119-21), the reporting threshold for nonemployee compensation on Form 1099-NEC rose to $2,000 for payments made after December 31, 2025.10Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide The threshold will adjust for inflation each year after 2026.11Office of the Law Revision Counsel. 26 U.S. Code 6041 – Information at Source
So if a client pays your disregarded-entity PLLC $1,800 for a project in 2026, that client has no 1099-NEC obligation, even though under the old rule they would have. Smaller engagements will now routinely fall below the reporting line. The income remains fully taxable either way.
Filling Out Your W-9 So Clients Classify You Correctly
Form W-9 is how clients determine whether they owe you a 1099. A wrong entry causes one of two problems: unnecessary 1099s land in your mailbox, or clients begin backup withholding at 24% because they can’t verify your status.12Internal Revenue Service. Backup Withholding
On the current W-9, here is how each PLLC classification is entered:13Internal Revenue Service. Form W-9 (Rev. March 2024)
- Disregarded entity: do not check the LLC box; check the box for your owner’s classification, typically “Individual/sole proprietor.” Use your SSN or the PLLC’s EIN.
- Partnership: check the “Limited liability company” box and enter “P” in the tax classification field. Use the PLLC’s EIN.
- S corporation: check the “Limited liability company” box and enter “S”. Use the PLLC’s EIN.
- C corporation: check the “Limited liability company” box and enter “C”. Use the PLLC’s EIN.
The “S” or “C” designation is what signals the corporate exemption to the payer. Leave it blank or check the wrong box, and 1099-NECs you shouldn’t receive will arrive, or backup withholding may begin.
Payments Through Credit Cards, PayPal, and Payment Apps
When clients pay through a credit card, PayPal, Venmo, or another third-party payment platform, the rules change. Those payments get reported by the processor on Form 1099-K, and the client does not also issue a 1099-NEC. The IRS instructions are explicit that payments settled through third-party networks are not subject to 1099-NEC or 1099-MISC reporting.14Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
For 2026, the 1099-K threshold reverted to $20,000 and 200 transactions.15Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill Below that, the processor won’t send a 1099-K either. The income is still taxable.
No 1099 Doesn’t Mean No Tax
Not receiving a 1099 does not make income tax-free. Your PLLC owes tax on every dollar of business revenue, whether or not a payer files an information return. With the threshold at $2,000, more payments will pass under the reporting radar than before, which makes your own books the primary record.
Report income based on invoices, deposits, and payment records on whichever return matches your classification: Schedule C for a disregarded entity, Form 1065 for a partnership, Form 1120-S for an S corporation, or Form 1120 for a C corporation. The IRS matches 1099s filed by payers against income reported on returns. If a payer reports a payment your return doesn’t include, expect a CP2000 notice proposing additional tax and interest.16Internal Revenue Service. Topic No. 652, Notice of Underreported Income – CP2000 If a client mistakenly issues a 1099-NEC to your corporate-taxed PLLC, you can still file your return accurately and respond to any CP2000 with documentation showing your corporate tax status.