Form 1099-MISC is a government form businesses use to show miscellaneous payments they distribute, and taxpayers report them on their annual tax returns. In the past, the Internal Revenue Service (IRS) referred to this document as Form 1099-MISC (Miscellaneous Income), but now they refer to it as Form 1099-MISC (Miscellaneous Information).
1099-MISC vs. 1099-NEC
Before 2020, businesses reported nonemployee compensation and miscellaneous income on Form 1099-MISC. Now, they report nonemployee compensation to contractors, freelancers, and other nonemployees using a separate form, Form 1099-NEC.
What Is Form 1099-MISC Used For?
Businesses file form 1099-MISC for each person to whom they’ve paid [1] :
- At least $10 in broker payments or royalties in lieu of tax-exempt interest or dividends.
- At least $600 in:
- The fishing boat proceeds.
- The cash paid from a notional principal contract to an estate, partnership, or individual (in most cases).
- Crop insurance proceeds.
- Other income payments.
- Rent.
- Payments to an attorney.
- Cash payments for fish or other aquatic life you buy from anyone participating in the fish-catching industry.
- Medical and health care payments.
- Prizes and awards (such as cash prizes from TV game shows).
Furthermore, please use Form 1099-MISC to report that you directly sold at least $5,000 of consumer goods to a buyer planning to resell the products in a location that’s not a permanent retail establishment.
Exceptions
Some types of compensation might be taxable to the recipient but don’t require reporting on Form 1099-MISC. Here are some types of compensation excluded from the 1099-MISC form:
- Payments to a corporation (ensure to also report payments to an LLC that the IRS treats as an S or C corporation).
- Payments for storage, freight, telephone, telegrams, merchandise, and similar items.
- Rent payments to property managers or real estate agents. (Note: the property manager or real estate agent should use Form 1099-MISC to report the rent payments they submit to the property owner).
- Wages paid to employees (use Form W-2 instead).
- Military differential wage payments to employees while serving in the U.S. Armed Forces or other uniformed services (use Form W-2).
- Cost of current life insurance protection.
- Business travel allowances paid to employees.
- Payments to tax-exempt organizations.
- Compensation for wrongful imprisonment if there was a conviction under state or federal law.
- Compensation for sickness or injuries by the Department of Justice (DOJ) as a public safety officer (PSO).
- Payments made to or for homeowners from a state’s Housing Finance Agency (HFA) (use Form 1098-MA).
When Is Form 1099-MISC Due?
1099-MISC forms for all purposes are due to the IRS by February 28, 2024, or March 31, 2024, if you’re filing electronically.
You must issue the form to the recipient by February 15, 2024, for gross proceeds paid to attorneys, substitute dividends, or tax-exempt interest payments. You should issue all other payments to the recipient by January 31, 2024.
How to Fill Out Form 1099-MISC
Before you fill out Form 1099-MISC, you can learn about its structure. It consists of three columns. The first column has boxes for the payer’s and recipient’s general information. The other two columns have boxes for compensation information.
This form contains multiple copies. You might have to fill out as many as five copies, as there are copies for the IRS, your state’s tax department, the recipient’s records, the recipient’s state tax department, and yourself (as the payer).
All the copies contain the following sections to fill out:
Payer’s Details
The payer should write their business name, address, and telephone number. Include the city name, state, and ZIP code within the address.
Taxpayer Identification Numbers (TINs)
Include the recipient’s and payer’s TINs. Make sure you write the numbers in the proper format and place the hyphens appropriately:
- Write Employer Identification Numbers (EINs) like XX-XXXXXXX.
- Write social security numbers and other individual taxpayer identification numbers like XXX-XX-XXXX.
Recipient’s Details
Write the recipient’s details, including their business name and street address.
Account Number
You may need to assign an account number for each 1099-MISC you file. Here are two instances in which an account number is necessary:
- The Foreign Account Tax Compliance Act (FATCA) Requirement box (Box 13) is selected.
- The payer is filing at least two 1099-MISC forms for one recipient and has multiple accounts with them.
Box 1: Rents
Provide the amount you paid in rent (if it totals more than $600) for the following rent types:
- Pasture rentals
- Machine rentals
- Commercial real estate rentals (office space)
Box 2: Royalties
Include gross royalty payments that exceed $10. Some examples of royalty amounts include income from intangible assets (trademarks and patents), royalties from a publisher, gas, oil, and other minerals.
Surface royalties are an exception; report them in Box 1 instead of Box 2.
Box 3: Other Income
Some types of miscellaneous income may not fall into a specific category. If you have these income types, you can report them in Box 3. The IRS has guidance on other special cases, including punitive damages and deceased employees’ wages [2] .
Box 4: Federal Income Tax Withheld
As a payer, you may need to withhold a 24% tax. This measure safeguards if the recipient doesn’t report a payment on their own tax return.
Report the amount of your backup withholding in Box 4. Also, include any income tax that you withhold from payments to Indian tribe members operating gambling activities (Class II or Class III).
Box 5: Fishing Boat Proceeds
Fishing boat operators with crews of less than 10 people should report the proceeds they pay to crew members.
Box 6: Medical and Health Care Payments
Total your payments to medical service supplies, health care providers, and physicians.
While you can’t include money paid to a pharmacy for prescription medicine, you can report incidentals, including medical devices and injections.
Box 7: Payer Made Direct Sales
Check this box if you sell consumer products valued at least $5,000 to a buyer for resale.
You may file a 1099-NEC instead of a 1099-MISC, but don’t report direct consumer sales on both documents.
Box 8: Substitute Broker Payments in Lieu of Dividends or Tax-Exempt Interest
If you issued customer or broker payments exceeding $10 as a replacement for tax-exempt interest or dividends, you can enter them in Box 8.
Box 9: Crop Insurance Proceeds
If you’re an insurance company that’s paid more than $600 in crop insurance proceeds to a farmer, you must report this information in Box 9. You only don’t have to report crop insurance proceeds if your company has recognized them as assets.
Box 10: Gross Proceeds Paid to an Attorney
Record payments relating to legal proceedings. Exclude payments you make that are directly for settlement funds or other services the attorney provides.
Box 11: Fish Purchased for Resale
If you buy fish from commercial fishing businesses and intend to resell them, include the total amount of all cash payments in Box 11.
Box 12: Section 409A Deferrals
You can skip Box 12 because the IRS no longer requires employers to announce employee deferrals [3] .
Box 13: FATCA Filing Requirement
The FATCA helps prevent U.S. persons conducting business outside the U.S. from evading their taxes. Check this box if you’re filing your 1099-MISC to abide by this act.
Box 14: Excess Golden Parachute Payments
Include the total amount of excess golden parachute payments, which are funds a company guarantees to an officer or shareholder if they lose their place in the company.
Box 15: Nonqualified Deferred Compensation
Include any amount of nonqualified deferred compensation (NQDC), which is money that a company delays from a person’s salary.
Write the total amount deferred and any associated earnings. Ensure to include any amount per 26 U.S. Code § 409A.
Boxes 16-18: State-Specific Information
You may not need to fill out Boxes 16 through 18 if you participate in the program that combines federal and state tax filing. You can also skip this section if your state doesn’t require you to file state income tax.
How to File Form 1099-MISC
If you’re filing by mail, you must mail an official scannable form with red print to the IRS. To order a Copy A of the 1099-MISC form for filing with the IRS, visit the IRS’s Online Ordering for Information Returns and Employer Returns store. You can print and/or mail all other copies (Copy 1, B, 2, and C) to their intended recipients.
Follow these steps to file Form 1099-MISC:
- Collect W-9s from each recipient. This form helps you collect each recipient’s information, like their address and TIN.
- Select a filing method. You might be able to file by mail, online, or via a third-party service. Ensure you follow the IRS’s requirements for e-filing [4] .
- Fill out Form 1096. Form 1096 helps you summarize the information on your Form 1099-MISC. While filling this out, you can also complete Copy A of your Form 1099-MISC, the official copy that goes to the IRS.
- Mail Copy A and Form 1096. Mail these two documents to the correct address, depending on your location [5] .
- Fill out Copy 1. Fill out Copy 1 and file it with your state’s department, if applicable.
- Distribute Copy B to the recipients. Ensure all recipients get a copy for their records.
- Keep Copy C. Keep Copy C for your records so you can refer to it if a dispute arises.
Form 1099-MISC Sample
Download Form 1099-MISC as a PDF file below so you can start filling yours out:
Frequently Asked Questions
Who Should File a 1099-MISC Form?
The payment entity (i.e., the payer) should complete a 1099-MISC form. The payer should then mail the completed form to each recipient.
How Do I Correct a 1099-MISC?
Fill out a new Form 1099-MISC and select the “Corrected” checkbox. Mail the form to the appropriate address. Include a Form 1096 and an explanation of why you made the changes.
How Do I Void a 1099-MISC I Already Sent to the IRS?
While you can’t void a form you’ve already sent, you can create a corrected form. The IRS will use the form you submitted most recently without penalty if it arrives by the designated due date.
Can I Print Copies of Form 1099-MISC?
You can print copies of Form 1099-MISC for your own records, but you can’t print your own Copy A to send to the IRS. Instead, you must use the official Copy A (with red print) from the IRS, which a business can order from the IRS’s website. Please note that this official copy is scannable, and not all printers can produce scannable versions.
