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Do You Need to Send a 1099 to a Corporation?

It’s commonly believed that businesses don’t need to send 1099 forms to corporations, but there are exceptions. Knowing when and how to report payments to corporations is crucial for compliance.

When Corporations Don’t Require a 1099

Payments to C-corporations and S-corporations are generally exempt from 1099 reporting. For example:

  • Paying a corporate graphic design agency does not require a 1099.
  • Corporate landlords typically don’t need a 1099 for rent payments.

Exceptions to the Rule

You do need to issue a 1099 to corporations in specific situations, including:

  • Legal Services: Payments for legal fees of $600 or more must be reported, regardless of the law firm’s corporate status.
  • Medical and Healthcare Services: Payments to healthcare providers must also be reported, even if they are incorporated.

Best Practices

  • Always request a W-9 form from vendors to confirm their business structure.
  • Consult IRS guidelines to clarify when reporting is necessary.

Staying informed about these exceptions ensures you remain compliant without overreporting.

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