Who Must File 1099 Forms?

Form 1099 is used to report income paid to freelancers.

There are multiple types of Form 1099, and there different types of income that are reported using the form. Recipients of income will receive copies of 1099s from the payer, but it is the payer who must file the 1099 with the IRS.

Identification

Form 1099 is known as an information return to the Internal Revenue Service. This form is used to report income paid out other than wages, salaries or tips, which would be reported on a W-2.

Who Must File

Businesses who pay independent contractors, royalties or other non-employee workers file a 1099. Lottery winnings, estate payments and legal settlements will also trigger the use of form 1099 for the agent sending the payment.

Who Doesn't Need 1099s

If you are considered an employee by anyone you do not file this form. If you pay out compensation less than $600 to any one person during a calendar year, that person does not need a form 1099.

Types

There are various types of 1099 forms depending on the situation in which you distributed money. Currently there are 11 variations of this form.

Uses

Form 1099 takes the place of form W-2 in regard to reporting income. This form also has a use in showing each separate distribution just as multiple W-2s would show different employees.

Resources

• Guide to IRS Forms and Publications