Resources · Guide
The 1099 deadline guide. January 31, every year.
If you paid an independent contractor $600 or more last year, the IRS expects you to send them a 1099-NEC by January 31 — and a copy goes to the IRS the same day. Miss it and the penalty starts at $60 per form and climbs fast. This guide walks through who needs one, who doesn’t, and how to actually prep before the deadline catches you flat-footed.
~6 min read · Twin Cities, Minnesota
The short version
- Who gets a 1099-NEC: any non-employee you paid $600+ for services (cash, check, ACH, direct bank transfer).
- Who doesn’t: C-corps and S-corps (with two exceptions below), employees (they get a W-2), and anyone paid only through credit card or third-party payment apps (PayPal, Stripe — those send 1099-Ks instead).
- By when: January 31 to the contractor AND to the IRS. Same day, no extension for the IRS copy.
- What you’ll need: a completed W-9 from each contractor (full legal name, address, TIN or SSN) and your total payments to them for the calendar year.
Who gets a 1099-NEC.
Any non-employee you paid $600 or more during the calendar year for services rendered to your business. That includes:
- Independent contractors and freelancers (graphic designers, copywriters, photographers, consultants)
- Trade subcontractors paid directly (electricians, plumbers, drywallers working under your business)
- Cleaning services, lawn care, snow removal — if paid to an individual or single-member LLC
- Attorneys (any amount, any entity type — lawyers are always reportable on a 1099 if paid $600+)
- Rent paid to a landlord who isn’t a corporation (Box 1 on a 1099-MISC, not the NEC)
Who doesn’t — and the exceptions.
Most C-corps and S-corps don’t get 1099s. The W-9 they give you tells you their entity type — if Box 3 says “C Corporation” or “S Corporation,” you skip them. Two notable exceptions:
- Attorneys. Always 1099, regardless of entity type. A $5,000 retainer to a law firm structured as an S-corp still gets a 1099.
- Medical / health payments. Payments to corporations for medical or healthcare services are still reportable on a 1099 if $600+.
Also exempt: anyone you paid exclusively through credit card, debit card, PayPal, Stripe, Square, or similar third-party processors. Those platforms issue their own form (1099-K) directly. If you paid the same contractor $400 by check and $300 by Stripe, only the $400 counts toward the $600 threshold for your 1099.
How to prep before January 31.
1. Pull every vendor you paid by check or ACH. Open your books or your bank statements and identify anyone you paid more than $600 in the calendar year. Credit card payments and Stripe / PayPal payments don’t count — the processor handles those.
2. Check that you have a W-9 from each one. The W-9 gives you their legal name, address, TIN/SSN, and entity type. If you don’t have one, ask now — not on January 30. Best practice: ask for W-9s before the first payment, not after the year ends.
3. Eliminate the corporations. C-corp and S-corp vendors don’t get 1099s (except the two exceptions above). Cross them off.
4. Calculate total paid to each remaining vendor. Year totals, by name. This is where bookkeeping clients have it easy — if your books are clean, this is a five-minute report. If your books aren’t clean, it’s a long evening.
5. File before January 31. E-file is easiest — the IRS uses the FIRE system, or any of QuickBooks / Tax1099 / Track1099 will do it for you for $3–$5 per form. The contractor gets a copy (mail or email with their consent) and the IRS gets one the same day.
What happens if you miss the deadline.
Penalty per form scales with how late you are:
- Up to 30 days late: $60 per form
- 31 days through August 1: $130 per form
- After August 1 or not filed at all: $340 per form
- Intentional disregard: $680+ per form, no cap
Twenty contractors filed three months late = $2,600+ in penalties for paperwork the actual filing cost you $60 in e-file fees. The deadline is unforgiving on purpose.
Don’t want to do this yourself?
We handle the whole 1099 stack.
If you’re a bookkeeping client we already have the vendor records and the totals — January 31 becomes a two-day project, not a two-week scramble. See 1099 prep under bookkeeping or send us a quick email.