How to Send 1099s: Forms, Deadlines, and Penalties

To send 1099s correctly, collect a Form W-9 from every contractor or vendor before you pay them, total each payee’s calendar-year payments, issue a Form 1099-NEC for $600 or more in services (or a 1099-MISC for rent, royalties, and other qualifying payments), deliver the recipient copy by January 31, and file the IRS copy electronically through the IRIS portal if you have 10 or more information returns of any type. The rest is knowing which payments count, which form each one belongs on, and how to fix things when they go wrong.

Confirm the Payment Actually Requires a 1099

The trigger is $600 or more paid during the calendar year, to a single payee, for services, rent, or certain other categories, made in the course of your trade or business. Personal payments do not count. The $600 is a full-year total per payee, not an invoice-by-invoice test.¹ Royalties have a lower $10 threshold.²

Several categories drop out:

Payments to C-corporations and S-corporations, including LLCs taxed as corporations, are generally not reportable.¹
Payments strictly for merchandise, inventory, or freight are not reportable.
Payments made through a third-party processor such as PayPal or Stripe are reported by the processor on Form 1099-K, not by you. The 1099-K threshold is $20,000 and more than 200 transactions after Congress reverted the lower threshold enacted under the American Rescue Plan Act.³
Payments to non-U.S. persons or entities go on Form 1042-S instead of a 1099.⁴

The big trap in that list is attorneys. Legal fees above $600 are reportable on Form 1099-NEC even when the law firm is a corporation, and settlement proceeds paid through an attorney are reported on Form 1099-MISC. The corporate exemption does not shield your law firm payments.⁵

One boundary worth stating out loud: 1099s are for independent contractors. If the person you are paying is really an employee under the IRS’s behavioral-control, financial-control, and relationship tests, a W-2 is the correct form and a 1099 will not cure the misclassification.⁶

Get a Signed W-9 Before You Pay Anyone

Form W-9 gives you the vendor’s legal name, business name, address, entity classification, and taxpayer identification number (a Social Security number for individuals, an EIN for entities).⁷ The entity box on that form is what tells you whether a 1099 is required at all. Collecting the W-9 during vendor onboarding, before the first check goes out, is much easier than chasing paperwork in January.

If a vendor refuses to give you a TIN or supplies one the IRS rejects, you have to withhold 24% of every payment and remit it to the IRS on Form 945, the annual return for withheld federal income tax from nonpayroll payments. This is backup withholding.⁸⁹ Mentioning the 24% withhold is usually enough to get a W-9 back quickly.

Pick the Right Form: 1099-NEC or 1099-MISC

Form 1099-NEC covers nonemployee compensation. Payments to freelancers, consultants, subcontractors, and attorneys for their services go in Box 1.⁵

Form 1099-MISC covers the other categories. The boxes you are most likely to use:

Box 1: rent of $600 or more
Box 2: royalties of $10 or more
Box 3: prizes, awards, and other income of $600 or more
Box 6: medical and healthcare payments of $600 or more
Box 10: gross proceeds paid to an attorney, such as settlement funds routed through the attorney’s trust account

Attorney payments split across the two forms. Fees for the attorney’s own work belong on 1099-NEC Box 1. A settlement amount that flows through the attorney belongs on 1099-MISC Box 10.²

Send the Recipient Copy

Each payee gets Copy B of their 1099 by January 31, whether it is an NEC or a MISC. Most businesses mail it first-class to the address the vendor put on the W-9.

You can deliver electronically, but the consent rules are specific. The recipient must give affirmative electronic consent in a way that shows they can access the format you will use. Before consenting, they have to be told that a paper copy is still available on request, how to withdraw consent, the hardware and software they will need, and how long the document will stay online. A new consent is required whenever you change delivery technology.¹⁰ Emailing a PDF without going through that process does not meet the requirement.

File the IRS Copy

The Electronic Filing Threshold

If your business files 10 or more information returns of any type in the calendar year, you must file electronically. The count is an aggregate across return types. Six 1099-NECs plus four W-2s hits the threshold, and everything then has to be e-filed.¹¹ Under 10 returns, paper is still allowed.

Filing Through IRIS

The IRS Information Returns Intake System (IRIS) is the free electronic filing route. The IRIS Taxpayer Portal lets you create, edit, and submit 1099s directly on the IRS site with no third-party software. You can key data in manually or upload a CSV, submit up to 100 forms at a time, and download printable recipient copies to mail.¹² The older FIRE system is still available for the 2026 filing season and is scheduled to retire on December 31, 2026, so getting comfortable with IRIS now is worthwhile.¹¹

Paper Filing

Paper filers must use the official red-ink scannable Copy A forms. Black-and-white printouts from a downloaded PDF will be rejected. Order the forms from the IRS or pick them up at an office supply store. Each paper submission also needs Form 1096 as a cover sheet, and you need a separate 1096 for each form type: one for all your 1099-NECs, another for all your 1099-MISCs.¹³

Deadlines

Form 1099-NEC: recipient copy and IRS copy both due January 31.¹
Form 1099-MISC recipient copy: due to the payee by January 31.
Form 1099-MISC IRS copy: February 28 on paper, March 31 if filed electronically.¹

When a due date lands on a weekend or federal holiday, it moves to the next business day.

State Filing

Many states want their own copy. The Combined Federal/State Filing Program forwards your data to participating states automatically when you e-file through IRIS or FIRE with the right state codes, at no additional cost.¹⁴ Some participating states still ask for a separate notice, and nonparticipating states require you to file directly with the state agency on their own schedule. Check the rules for every state where a contractor is based.

Fixing Mistakes on a Filed 1099

Corrections depend on what went wrong:

Wrong dollar amount: file a new form with the correct number and check the “Corrected” box at the top. Send the correction to both the IRS and the recipient.
Wrong payee name or TIN: this takes two corrected forms. The first zeros out the incorrect entry. The second reports the right payee and amounts.

Do not check the “VOID” box on paper corrections. The IRS scanner treats voided forms as ones to skip, so your correction will not register.¹ Paper corrections need a fresh Form 1096. Electronic corrections go through IRIS. Get the corrected copy to the payee quickly so they can file an accurate return.

If You Will Miss the Deadline

Form 8809 requests an automatic 30-day extension for most 1099 types, including the 1099-MISC. No reason is needed for the initial extension, and it can be submitted through IRIS.

Form 1099-NEC does not get the automatic treatment. Extensions for the NEC are nonautomatic: you have to file Form 8809 on paper, sign it, and give a written justification. Acceptable reasons include a federally declared disaster affecting your operations, the death or serious illness of the person responsible for filing, or being in your first year of business. Only one 30-day extension is available for the NEC, with no further extensions.¹⁵

What Late or Wrong Filing Costs

Penalties for returns due in 2026 are tiered by how quickly you fix the problem:

Corrected within 30 days of the due date: $60 per return
Corrected after 30 days but before August 1: $130 per return
Corrected after August 1 or never filed: $340 per return
Intentional disregard: $680 per return with no annual cap

Failing to file the IRS copy and failing to furnish the recipient copy are counted as two separate violations for the same form.¹⁶

TIN Mismatch Notices

The IRS sends Notice CP2100 (50 or more errors) or CP2100A (fewer than 50) when the name and TIN on your filing do not match its records. You then send a “B-Notice” to the affected vendor asking for a corrected W-9. If they do not respond with a valid TIN, you must start backup withholding at 24% on future payments.¹⁷ Handling these notices promptly is one of the best pieces of evidence for a reasonable-cause defense later.

Reasonable-Cause Waivers

If penalties are assessed, you can request a waiver by showing the failure was due to reasonable cause and not willful neglect. The IRS looks for significant mitigating factors, such as being a first-time filer of that return type or having a strong compliance history, or events beyond your control such as a fire, natural disaster, or serious illness of the person responsible. You also have to show you acted responsibly before and after the failure, meaning you took reasonable steps to comply and corrected the problem quickly once you knew.¹⁸

Keep the Paperwork

Retain copies of every 1099 you filed, every signed W-9 you collected, and the supporting documentation for each payment: contracts, invoices, bank statements, and canceled checks. The IRS requires employment tax records for at least four years after the filing date.¹⁹ Holding W-9s for the life of the vendor relationship plus four years after the last payment is the safer practice. If a filing is ever questioned, this is what proves you asked the right questions and reported the right numbers.

1
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill; Dollar Limit Reverts to $20,000
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Internal Revenue Service. About Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025)
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Internal Revenue Service. Independent Contractor (Self-Employed) or Employee?
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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. Backup Withholding
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Internal Revenue Service. About Form 945, Annual Return of Withheld Federal Income Tax
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Internal Revenue Service. General Instructions for Certain Information Returns (2025)
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Internal Revenue Service. Topic No. 801, Who Must File Information Returns Electronically
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Internal Revenue Service. Information Returns Intake System (IRIS) IRIS 101
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Internal Revenue Service. About Form 1096, Annual Summary and Transmittal of U.S. Information Returns
14
Internal Revenue Service. Combined Federal/State Filing (CF/SF) Program
15
Internal Revenue Service. Form 8809, Application for Extension of Time To File Information Returns
16
Internal Revenue Service. 20.1.7 Information Return Penalties
17
Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice
18
eCFR. 26 CFR 301.6724-1 – Reasonable Cause
19
Internal Revenue Service. Employment Tax Recordkeeping