INSIGHTS

Key Facts about Form 1099s

by Reanna Claypool

ARTICLE | Revised Dec 12, 2025

Who Must File Forms 1099-MISC and 1099-NEC?

Corporations, partnerships, individuals, estates and trusts that receive services from vendors that meet stated threshold amounts during a calendar year must provide Forms 1099-MISC and 1099-NEC to the recipients of the income. Filers who have 10 or more forms must file the IRS copy of these returns electronically. In addition, taxpayers must file a companion Form 1096 with the IRS that summarizes the number and dollar amount of Forms 1099-MISC and 1099-NEC provided to recipients.

What 1099 Form Should I File?

The Internal Revenue Service requires that an information return called a Form 1099 be filed each year to report certain business transactions. There are a number of Forms 1099 to choose from, and selecting the correct one can be tricky. The following information describes what is reported on and when each is due. Please contact us for questions about or assistance with completing the appropriate Forms 1099.

FORM	TITLE	WHAT TO REPORT	AMOUNT OF REPORT	DUE DATES
1099-A	Acquisition or Abandonment of Secured Property	Information about the acquisition or abandonment of property that is a security for a debt for which you are the lender	All Amounts	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-B	Proceeds from Broker and Barter Exchange Transactions	Sales or redemptions of securities, futures transactions, commodities and barter exchange transactions	All Amounts	To Recipient: Feb. 17 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-CAP	Changes in Corporate Control and Capital Structure	Information about cash, stock or other property from an acquisition of control or the substantial change in capital structure of a corporation	Amounts of stock or property valued at $1,000 or more	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-DIV	Dividends and Distributions	Distributions, such as dividends, capital gain distributions or nontaxable distributions, that were paid on stock and liquidation distributions	$10 or more, except $600 or more for liquidations	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-H	Health Coverage Tax Credit Advance Payments	Health insurance premiums paid on behalf of certain individuals	All Amounts	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-INT	Interest Income	Interest Income	$10 or more ($600 or more in some cases)	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-K	Merchant Card and Third Party Network Payments	Payments made with a credit card, debit card or third party network player	Third party settlement organizations: When gross payments exceed $20,000 and there are moer than 200 transactions for a payee. Merchant entities: All Amounts	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-LTC	Long-Term Health and Accelerated Death Benefits	Payments under a long-term care insurance contract and accelerated death benefits paid under a life insurance contract or be a viatical settlement provider	All Amounts	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-MISC	Miscellaneous Income	Rent or royalty payments; prizes and awards that are not for services; medical payments; gross proceeds paid to attorneys; and fish purchases paid in cash for resale	In general, $600 or more, *some exceptions apply	To Recipient: Jan. 31 ( some Feb. 17 ) To IRS Paper: Mar. 02 To IRS E-File: Mar. 31 *some exceptions apply
1099-NEC	Non-employee Compensation	Payments for services performed for a trade or business by people not treated as its employees. Examples: fees to subcontractors, legal & professional services, advertising, custom work, management fees, etc.	$600 or more	To Recipient & IRS: Jan. 31
1099-PATR	Taxable Distributions Received From Cooperatives	Distributions from cooperatives passed through to their patrons, including any domestic production activities deduction and certain pass-through credits	$10 or more	To Recipient: Jan. 31 To IRS Paper: Mar. 02 To IRS E-File: Mar. 31
1099-R	Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.	Distributions from retirement or profit-sharing plans, any IRA, insurance contracts, and IRA recharacter-izations	$10 or more	To Recipient: Jan. 31 To IRS: Feb. 28
1099-S	Proceeds From Real Estate Transactions	Gross proceeds from the sale or exchange of real estate and certain royalty payments	Generally, $600 or more	To Recipient: Feb. 17 (Because Feb. 15, 2026 is a Sunday and Feb. 16 is Presidents’ Day, the deadline moves to Tuesday, Feb. 17.) To IRS: Feb. 28
1099-SA	Distributions From an HSA, Archer MSA, or Medicare Advantage MSA	Distributions from an HSA, Archer MSA or Medicare Advantage MSA	All Amounts	To Recipient: J an. 31 To IRS: Feb. 28

What to Report on Form 1099-MISC

Amounts of $600 or More For:

All types of rental payments, including equipment, pasture land, office space, etc.;
Payments to a physician, physicians’ corporation or other supplier of health and medical services. (Issued mainly by medical assistance programs or health and accident insurance plans.);
Fish purchases for resale paid in cash;
Prizes and awards not for services, such as winnings on TV or radio shows;
Indian gaming profits paid to tribal members;
Exchanges of services between individuals in the course of their trades or businesses;
Crop insurance proceeds; and
Fees and gross proceeds paid to all attorneys.

Amounts of $10 or More For:

Substitute dividends and tax-exempt interest payments reportable by brokers; and
Royalties.

All Amounts For:

Payments to crew members by owners or operators of fishing boats, including payments of proceeds from sale of catch; and
Section 409A income from non-qualified deferred compensation plans (NQDCs).

These updates apply to the 2025 tax year, filed in 2026. 1099-MISC and 1099-NEC thresholds will increase to $2,000 and will continue to adjust with inflation. For more information visit: “Why 2026 Brings Smarter 1099 Rules“.

What to Report on Form 1099-NEC

Amounts of $600 or More For:

Payments for services performed for a trade or business by people not treated as its employees.

Amounts of $5,000 or More For:

Aggregated direct sales of consumer goods for resale.

What NOT to Report on Form 1099-MISC and 1099-NEC

Don’t report payments made with a debit card, credit card or through another third party payer, such as Paypal, on Form 1099-MISC or Form 1099-NEC. The intermediary is required to report these transactions on Form 1099-K.

Additionally, don’t report payments to corporations, except in the case of attorney fees and health and medical payments. Also, don’t report payments that should be reported on any other informational form. (See section above article titled Which 1099 Form Should I file?)

Potential Penalties

If you fail to file a correct information return by the due date and you cannot show reasonable cause, you may be subject to penalty. Penalty amounts are based on when you file the correct return and range from $60-$340 per return. In addition, failure to file due to intentional disregard of the filing requirements carries a penalty of $680 per return (or 10% of amounts required to be reported, whichever is greater) with no maximum.

Small Business Note:

Lower maximum penalties apply if your average annual gross receipts are $5 million or less for the past 3 years.

The IRS may waive penalties if you can show reasonable cause, but catching errors early is far easier than requesting penalty relief.

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Reanna Claypool

Manager

Reanna joined Larson Gross in 2018 after graduating from Bellingham Technical College in Accounting the same year. She specializes in agriculture but loves any bookkeeping project she can get her hands on. She is a Certified QB ProAdvisor and is an expert at cleaning up financials.