Does an LLC Partnership Get a 1099? Rules by Tax Classification

Yes. If your business pays an LLC that’s taxed as a partnership $2,000 or more for services in 2026, you need to issue it a Form 1099-NEC. The confusion here is understandable: LLCs taxed as corporations are exempt from 1099 reporting, and many payers assume LLCs taxed as partnerships get the same treatment. They don’t. The IRS treats partnerships as reportable payees, and the answer to “does an LLC partnership get a 1099” is a clear yes once the dollar threshold is met.

Why Partnerships Aren’t Exempt

The exemption people are thinking of is the corporate exemption. Payments to a corporation, including an LLC that checked the C-Corporation or S-Corporation box on its W-9, generally do not require a 1099-NEC for services.¹ Partnerships are not corporations. The General Instructions for Certain Information Returns state plainly that “reporting is generally required for all payments to partnerships,”² and the 1099-NEC instructions list partnerships alongside individuals and estates as entities that trigger reporting.³

The fact that the partnership files its own Form 1065 doesn’t change the payer’s obligation. If your vendor’s W-9 shows “Partnership” in the tax classification box, plan on issuing a 1099-NEC when the threshold is met.

The 2026 Threshold Is $2,000

For payments made after December 31, 2025, the 1099-NEC reporting threshold jumped from $600 to $2,000. Pay an LLC partnership $1,800 for consulting during 2026 and no 1099-NEC is required. Pay it $2,000 or more and the filing obligation kicks in. The $2,000 figure will adjust for inflation starting in calendar year 2027.⁴

The threshold is cumulative across the calendar year, not per invoice. Five payments of $400 to the same vendor add up to $2,000 and trigger reporting. Track vendor totals through the year rather than judging each check on its own.

How the LLC’s Tax Classification Changes the Answer

An LLC’s state-level structure tells you nothing about 1099 obligations. What matters is the federal tax classification the LLC selected with the IRS, which appears on its W-9.

LLC Taxed as a C-Corp or S-Corp

An LLC that elected corporate treatment (either C-Corp or S-Corp) is generally exempt from receiving a 1099-NEC for service payments.¹ Corporations file their own income tax return (Form 1120 or 1120-S), which is the IRS’s mechanism for tracking that income.⁵ A handful of payment categories override this exemption; see the next section.

Single-Member LLC (Disregarded Entity)

A single-member LLC that hasn’t elected corporate treatment is a disregarded entity. The IRS looks through the LLC to its individual owner, and a 1099-NEC is required when the threshold is met. Put the owner’s name and taxpayer identification number on the form, not the LLC’s, so the IRS’s automated matching accepts it.⁶

Husband-and-Wife LLCs

A married couple that co-owns an LLC might expect to elect qualified joint venture status and file as two sole proprietors. That election isn’t available for LLCs. The IRS states that a business owned through an LLC does not qualify for the qualified joint venture election,⁷ so the LLC defaults to partnership treatment. Issue the 1099-NEC when the threshold is met.

Payments That Require a 1099 Even to a Corporation

A few payment categories override the corporate exemption, which matters if you pay incorporated law firms or medical providers.

Legal Services

Attorneys’ fees of $2,000 or more paid in the course of your business go on Form 1099-NEC, box 1, regardless of how the law firm is organized. The IRS instructions are explicit that the corporate exemption does not apply to payments for legal services.³ Gross proceeds paid to an attorney in connection with legal services, such as a settlement payment routed through counsel, go on Form 1099-MISC, box 10, instead.¹

Medical and Health Care Payments

Payments of $600 or more to physicians, hospitals, or other health care providers go on Form 1099-MISC, box 6, even when the provider is a corporation.³ Note the different form and different threshold from the 1099-NEC rules above.

Rent

Rent payments of $600 or more go on Form 1099-MISC, but the corporate exemption does apply here. A landlord that is a corporation or an LLC taxed as a corporation generally doesn’t need a 1099-MISC for rent. A landlord that is an LLC partnership or disregarded entity does.³

The Credit Card and Payment Network Exception

If you pay the LLC partnership with a credit card, debit card, or third-party payment network such as PayPal, you do not issue a 1099-NEC for those payments. The IRS shifts the reporting burden to the payment settlement entity, which reports on Form 1099-K.¹ This prevents duplicate reporting of the same transaction.

The 1099-K threshold for third-party settlement organizations reverted to $20,000 and more than 200 transactions under the One, Big, Beautiful Bill.⁸ Credit card processors report regardless of dollar amount.⁹ Practical result: if you paid a vendor entirely by card, you have no 1099-NEC obligation for those payments.

Paying the Partnership vs. Paying Its Partners

Two different situations get confused here. When your business hires an LLC partnership as a vendor, that’s a third-party payment and it goes on a 1099-NEC (assuming threshold met, not paid by card). When the partnership pays its own partners, those payments run through Schedule K-1 of Form 1065, not a 1099. Guaranteed payments for services appear in box 4a of Schedule K-1.¹⁰

Foreign LLC Partnerships

If the LLC partnership is a foreign entity, the 1099-NEC is the wrong form. Nonemployee compensation paid to nonresident aliens is reported on Form 1042-S.¹¹ Foreign payees complete the W-8 series of forms rather than a W-9.

Get the W-9 Before You Pay

Collect a completed W-9 from every vendor before the first payment leaves your account. The federal tax classification box on the W-9 does the work: if the vendor checks “Partnership,” you know a 1099-NEC is coming once payments hit $2,000. If it checks “C Corporation” or “S Corporation,” service payments are generally off the hook.

The IRS offers a free TIN Matching service that lets you verify a vendor’s name-and-TIN combination before filing.¹² Matching before the January filing deadline catches errors that would otherwise return as penalty notices later in the year. Keep signed W-9s on file; the general record-retention period runs three to four years, extending to six years in some cases.¹³

Filing Deadline and E-File Rule

Form 1099-NEC is due to both the recipient and the IRS by January 31 of the year after payment.¹ There’s no automatic extension, so the date is firm.

If you file 10 or more information returns of any type combined, including W-2s, you must file electronically.¹⁴ The 10-return count aggregates across all information return types. Paper filing when e-file is required counts as a failure to file correctly and draws the same penalties.

Penalties and Backup Withholding

Penalties for late or incorrect 1099s scale with how late the correction lands. For returns due in 2026:¹⁵

Up to 30 days late: $60 per form
31 days late through August 1: $130 per form
After August 1 or not filed at all: $340 per form
Intentional disregard: $680 per form

These penalties apply separately for failing to file with the IRS and for failing to furnish the payee statement, so one missed 1099 can generate two charges.

Backup withholding is the other enforcement lever. When a vendor refuses to provide a W-9, or provides a TIN the IRS flags as incorrect, you must withhold 24% of each payment and remit it to the IRS.¹⁶ The withheld amounts get reported on Form 945.¹⁷ Telling a vendor you’ll have to withhold 24% usually produces a signed W-9 quickly. If it doesn’t, withhold and remit; the vendor can claim the withholding as a credit on its own return, and you avoid a penalty on top of unpaid tax.

1
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025)
2
Internal Revenue Service. General Instructions for Certain Information Returns (2025)
3
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025)
4
Internal Revenue Service. 2026 Publication 1099
5
Internal Revenue Service. About Form 1120, U.S. Corporation Income Tax Return
6
Internal Revenue Service. Single Member Limited Liability Companies
7
Internal Revenue Service. Election for Married Couples Unincorporated Businesses
8
Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
9
Internal Revenue Service. Understanding Your Form 1099-K
10
Internal Revenue Service. Partners Instructions for Schedule K-1 (Form 1065) (2025)
11
Internal Revenue Service. Reporting Payments to Independent Contractors
12
Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
13
Internal Revenue Service. How Long Should I Keep Records
14
Internal Revenue Service. E-file Information Returns
15
Internal Revenue Service. Information Return Penalties
16
Internal Revenue Service. Backup Withholding
17
Internal Revenue Service. About Form 945, Annual Return of Withheld Federal Income Tax