Issue IRS form 1099-NEC for Contractors by January 31 Each Year

Landlords, property managers and investors who pay non-employee contractors more than $2,000 in a tax year must report these payments on form 1099-NEC. Read the Internal Revenue Service instructions.

Since at least 2013, all LLCs have had the option to indicate the taxation status as shown here on this W-9 form. This form is from 2013, but the most recent revision has the same information. If the LLC is type “S” or “P,” you as payor must issue form 1099-NEC. (Image: Public domain.)

Before 2026, the reporting threshold was $600 for 1099-NEC and 1099-MISC payments. The limit has increased to $2,000 for both forms, starting with the 2026 tax year. You must issue this form to any applicable contractors by Jan. 31 for the prior tax year.

A contractor is a 1099 contractor if they're not a corporation that pays its own taxes and you paid them at least $2,000 in services in that tax year (including parts and materials). This means you have to mail the contractor and the IRS a form 1099-NEC.

Remember, an LLC is not necessarily a corporation that pays its own taxes. For tax purposes, LLCs are either pass-through partnerships or pay-on-their-own corporations. If your contractor uses an LLC, you need to know which one it is.

How Can You Tell if an LLC Is a 1099 Contractor?

Before you hire a contractor, ask them to fill out form W-9. There's a section on the form where they must indicate their tax status. If you forget, ask them to fill it out as soon as possible.

If your contractor is unwilling to fill out a W-9, this could be an indication that they are willing to skirt the law, and could be noncompliant with other rules and regulations.

What Happens if I Don’t Issue a 1099-NEC Form?

Avoid this at all costs. Not issuing a 1099-NEC when you should have indicates you are not properly reporting payments. This will dramatically increase the chances of an IRS audit.

Audits are time-consuming and annoying. It takes time to respond to auditor demands. Depending on the auditor and how they view your situation, audits also can be quite difficult.

If an audit finds you failed to report contractor payments on a 1099-NEC, it could be expensive. You will owe the tax that the contractor should have paid, plus penalties and interest.

What If I Forgot? Can I Issue the Forms Late?

Yes. The best time to correct an error is as soon as you realize you’ve made one. This is one instance where “better late than never” applies. Issue a 1099-NEC form immediately for reportable amounts.

Where Do I Get Form 1099-NEC?

Small landlords can order information returns by U.S. mail. Make sure to visit the employer page, not the individual taxpayer page. Make sure to order both forms:

• Form 1099-NEC
• Form 1096 (the cover sheet to form 1099-NEC)

You can also order instructions.

Larger landlords may find your accounting software can file forms for you.

Anyone can register for IRIS, the online reporting tool.

Note that you can download Form 1099-NEC as a fillable PDF. You can use this to print copies for your own records, or your contractor’s records. But you cannot print and file the coversheet or Form 1099-NEC from a PDF. Your return may be rejected if you do. You must either complete the form on the paper or file via IRIS.