Yes. If your business pays an LLC that is taxed as a partnership $600 or more for services during the year, you generally have to issue that LLC a Form 1099-NEC. The corporate exemption most people have heard about applies only to LLCs that elected to be treated as C-corporations or S-corporations. Partnerships, including LLCs taxed as partnerships, are on the reporting list alongside individuals and estates.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
Check the W-9 Before You Pay
An LLC is a state legal structure. For federal tax purposes, the same LLC can be a disregarded entity, a partnership, an S-corporation, or a C-corporation, depending on what it elected. You can’t tell from the name on the invoice. The Form W-9 is what tells you.
On a current W-9, an LLC taxed as a partnership checks the “Limited liability company” box on line 3a and enters “P” in the tax classification field.2Internal Revenue Service. Form W-9, Request for Taxpayer Identification Number and Certification A non-LLC partnership checks the separate “Partnership” box. Either entry means a 1099-NEC is required when you cross the $600 threshold for services. If the LLC classification field shows “C” or “S,” the corporate exemption applies and you usually don’t file a 1099-NEC for that vendor.
Collect the W-9 before the first payment goes out. Guessing at a vendor’s classification is where the expensive mistakes start, and paying without a W-9 in hand can pull you into backup withholding on top of any reporting error.
Why Partnerships Don’t Get the Corporate Exemption
The confusion is understandable. A partnership already files Form 1065 and issues Schedule K-1 to each partner reporting that partner’s share of income.3Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income It feels like the income is already accounted for. But the IRS drew the exemption line at corporations, not at “entities that file their own return.”
The General Instructions for Certain Information Returns say it directly: “Reporting is generally required for all payments to partnerships.”4Internal Revenue Service. General Instructions for Certain Information Returns The 1099-NEC instructions list the four conditions that together trigger a filing: the payment is to someone who is not your employee, it is for services in your trade or business, the recipient is an individual, partnership, or estate (and in some cases a corporation), and payments to that recipient total at least $600 for the year.5Internal Revenue Service. Reporting Payments to Independent Contractors
Consulting, bookkeeping, web development, marketing, contract labor — if the LLC partnership performed a service and you paid $600 or more across the year, the 1099-NEC is due. The fact that they also file Form 1065 doesn’t shift that obligation off your desk.
When You Have to Issue a 1099 Even to a Corporation
The mirror-image question comes up often enough that it’s worth flagging: a few payment types require a 1099 regardless of the recipient’s entity type, so even an LLC treated as a corporation isn’t always exempt.
Attorney Fees
Payments of $600 or more to an attorney for services must be reported on Form 1099-NEC no matter how the law firm is organized. Sole practitioner, partnership, LLC, or full corporation — all of them get a 1099-NEC for legal fees. The IRS defines “attorney” broadly to cover any law firm or provider of legal services.6Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC This is the single most common reason a business ends up filing a 1099 on a corporate vendor it would otherwise skip.
Medical and Health Care Payments
Payments of $600 or more for medical or health care services are reported on Form 1099-MISC, not 1099-NEC, and the reporting applies even when the provider is a corporation or partnership.7Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
Federal Executive Agency Payments
Federal executive agencies must report service payments to corporations on Form 1099-NEC. This one affects government contracting and doesn’t reach most private businesses.4Internal Revenue Service. General Instructions for Certain Information Returns
If the Partnership Won’t Give You a TIN
If a partnership refuses to provide a taxpayer identification number, or gives you one that is clearly wrong, you are required to withhold 24% of each payment and send it to the IRS.8Internal Revenue Service. Backup Withholding Due to Missing Payee TIN Backup withholding starts with the first payment you make without a valid TIN on file. The withheld amounts are reported and deposited using Form 945.9Internal Revenue Service. About Form 945, Annual Return of Withheld Federal Income Tax
The IRS offers a free TIN Matching Program that lets you verify a name and TIN combination against IRS records before you file. A successful match can also support a reasonable-cause defense if the IRS later challenges an information return.
Deadlines and What Missing Them Costs
Form 1099-NEC must be filed with the IRS and furnished to the recipient by January 31 of the year after the payments were made. No automatic extension is available for the 1099-NEC.10Internal Revenue Service. Form W-2 and Other Wage Statements Deadline Coming Up for Employers
Penalties are charged per form and climb the longer you wait. For returns due in 2026:11Internal Revenue Service. Information Return Penalties
- Filed within 30 days of the deadline: $60 per form
- Filed after 30 days but by August 1: $130 per form
- Filed after August 1 or not filed at all: $340 per form
- Intentional disregard: $680 per form
The penalties apply separately to failing to file with the IRS and to failing to furnish the payee statement, so one missed form can generate two penalties. Miss the deadline on a stack of vendors and the total climbs fast.
The short version: if the W-9 shows the LLC is a partnership and you paid $600 or more for services, cut the 1099-NEC by January 31. Keep the W-9 in your files as your record of why.