Who Needs a 1099?

A person or business generally needs a Form 1099 when they receive a type of payment that the tax law requires the payer to report on an information return.

Common examples include:

• Independent contractors and other nonemployees paid for services in the course of the payer’s trade or business
• Recipients of rents, royalties, prizes, awards, and certain other income payments
• Attorneys receiving certain reportable payments
• Recipients of medical and health care payments
• People receiving interest, dividends, or retirement distributions
• Merchants or other payees whose reportable payment card or third‑party network transactions are reported on Form 1099‑K

For the common business reporting forms, the general rule is that the payer files the form with the IRS and furnishes it to the person or business that received the payment.

Two important limits apply:

• Employees generally do not get a 1099 for wages. They generally receive Form W‑2 instead.
• Personal, nonbusiness payments generally do not require a 1099. The common 1099 reporting rules generally apply to payments made in the course of a trade or business.

Also, not every payee who receives money must get the same kind of 1099. The required form depends on the type of payment. For example, service payments commonly fall under Form 1099‑NEC, while rents and certain other payments commonly fall under Form 1099‑MISC.

Under current law, many nonemployee compensation and miscellaneous payments reportable on Forms 1099‑NEC and 1099‑MISC are subject to a general dollar‑amount threshold. For payments made in calendar years up to and including 2025, the longstanding 600‑dollar threshold in the IRS instructions continues to apply, with certain categories having their own thresholds or no dollar threshold (such as some payments subject to backup withholding). Under current IRS guidance, the general 600‑dollar threshold remains in effect unless and until it is changed by future legislation or updated IRS instructions.

Specific boxes and types of payments may have different rules or no dollar threshold, as described in the form‑specific instructions.

State law note

State information‑return rules can differ from the federal rules above. The controlling authority is the applicable state revenue department or tax agency.

Sources

IRS — Form 1099‑NEC and independent contractors

IRS — Am I required to file a Form 1099 or other information return?

IRS — About Form 1099‑MISC, Miscellaneous Information

IRS — General Instructions for Certain Information Returns (2025)

IRS — About Form 1099‑NEC, Nonemployee Compensation

This information provided does not, and is not intended to, constitute legal advice.