Whether you need to send a 1099 to an LLC comes down to how that LLC is taxed. If it’s a single-member LLC treated as a disregarded entity or a multi-member LLC taxed as a partnership, you must issue a 1099-NEC when you’ve paid it $600 or more for services in the course of your business. If the LLC has elected to be taxed as an S-corporation or C-corporation, you generally don’t, with a short list of exceptions covered below. The reliable way to tell which situation you’re in is to collect a Form W-9 from the LLC before you pay it.
Why the LLC Label Alone Doesn’t Answer the Question
The $600 reporting rule applies when your trade or business pays a non-employee for services during the year.1Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return2Internal Revenue Service. About Form 1099-NEC, Nonemployee Compensation3Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information Personal payments don’t count. If you hired a landscaper for your home, there’s nothing to file.
Corporations are generally exempt from 1099 reporting because they already face their own filing requirements.1Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return That’s where LLCs get complicated. An LLC is a state-law entity, not a federal tax category, so the IRS treats each LLC as one of several things depending on how it’s set up or what it has elected. “LLC” on an invoice tells you nothing about whether the corporate exemption applies.
How Each Tax Classification Changes the Answer
Single-Member LLC (Disregarded Entity)
A single-member LLC with no election on file is treated as a disregarded entity, which means the IRS looks past the LLC and treats its income as the owner’s.4Internal Revenue Service. Single Member Limited Liability Companies It isn’t a corporation for tax purposes, so the corporate exemption doesn’t apply. Pay it $600 or more for services and you owe a 1099-NEC.
Multi-Member LLC (Partnership)
A multi-member LLC with no election is taxed as a partnership. Partnerships don’t get the corporate exemption either, so the same $600 threshold applies.5Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
LLC Taxed as an S-Corp or C-Corp
An LLC can elect corporate treatment by filing Form 8832, and can further elect S-corporation status with Form 2553.6Internal Revenue Service. About Form 8832, Entity Classification Election Once that election is in place, the LLC is treated as a corporation for reporting purposes and the corporate exemption applies. In most cases you do not need to send a 1099.
Use Form W-9 to Find Out
The only reliable way to learn an LLC’s tax status is to ask for a completed Form W-9 before you pay. On line 3a, an LLC checks the “Limited liability company” box and enters a letter code: C for C-corporation, S for S-corporation, or P for partnership.7Internal Revenue Service. Instructions for the Requester of Form W-9 A single-member disregarded entity usually fills in the owner’s information rather than the LLC’s, since the LLC itself is ignored for tax purposes.
So the W-9 gives you a quick read:
- Code C or S: generally no 1099 required.
- Code P, or an owner’s information for a disregarded entity: 1099-NEC required at $600.
The W-9 also captures the Taxpayer Identification Number or Employer Identification Number you’ll need on the 1099 itself. If a vendor refuses to provide a W-9 or supplies an incorrect TIN, you’re required to apply 24% backup withholding to each payment and remit it to the IRS.8Internal Revenue Service. Backup Withholding Collecting a W-9 at onboarding, before the first check goes out, is the simplest way to avoid that problem.
Payments That Require a 1099 Even to a Corporate LLC
A handful of payment categories override the corporate exemption. Even if the LLC is taxed as a C-corp or S-corp, you still owe a 1099 for these:
- Payments of $600 or more to an attorney or law firm for legal services go on a 1099-NEC regardless of the firm’s entity type.5Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
- Payments of $600 or more to physicians, hospitals, or medical corporations for health care services go on a 1099-MISC even when the provider is incorporated.5Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
- Cash payments of $600 or more for fish bought from someone in the commercial fishing trade go on a 1099-MISC.3Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
The attorney exception trips up more payers than any other. Pay a law firm $5,000 for contract work, confirm from its W-9 that it’s a C-corp LLC, and you still owe the 1099-NEC.
Payments by Credit Card or Payment App Don’t Count
If you paid the LLC by credit card, debit card, or a third-party network like PayPal or Venmo, don’t include those payments on a 1099-NEC or 1099-MISC. The payment processor reports them separately on Form 1099-K, and double-reporting the same income is exactly what the rule exists to prevent. The 1099-K threshold is the processor’s concern: filing is required only when payments to a single payee exceed $20,000 and the number of transactions exceeds 200 in the year.9Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold
If you paid the same LLC partly by check and partly by card, only the check portion counts toward your $600 threshold. Track the method on each transaction so you can split them cleanly at year-end.
When the 1099 Is Due
Form 1099-NEC must reach both the recipient and the IRS by January 31. Form 1099-MISC is due to the recipient by January 31, to the IRS by February 28 on paper, or by March 31 if filed electronically.5Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC A deadline that falls on a weekend or holiday rolls to the next business day. If you file 10 or more information returns of any type combined, you must file electronically.10Internal Revenue Service. Publication 1099, General Instructions for Certain Information Returns (2026) The IRS runs a free portal called IRIS that handles entry or CSV upload.11Internal Revenue Service. E-File Information Returns With IRIS
What It Costs to Skip a Required 1099
Failing to file a correct 1099 on time carries per-return penalties that climb the longer the problem goes uncorrected. For returns required in 2026, the tiers for small businesses (averaging $5 million or less in gross receipts) are:12Internal Revenue Service. Revenue Procedure 2024-40
- $60 per return if corrected within 30 days, capped at $239,000.
- $130 per return if corrected after 30 days but by August 1, capped at $683,000.
- $340 per return if not corrected by August 1, capped at $1,366,000.
- $680 per return (or 10% of the amount that should have been reported, if greater) for intentional disregard, with no cap.
Larger businesses face the same per-return amounts with higher caps. A parallel set of penalties applies for failing to furnish the correct statement to the recipient. Catching mistakes inside the 30-day window keeps the cost at the lowest tier.
Foreign LLCs Follow a Different Set of Rules
If the LLC you’re paying is a foreign entity, the W-9/1099 process doesn’t apply. You request Form W-8BEN-E instead, which the foreign LLC uses to document its status. Without a valid W-8BEN-E on file, U.S.-source payments to the foreign LLC are subject to 30% federal income tax withholding, which can sometimes be reduced under a tax treaty if the documentation is in place before payment. If the foreign LLC is a disregarded entity, the owner generally provides the appropriate form based on the owner’s own status rather than the LLC submitting its own W-8BEN-E.13Internal Revenue Service. Instructions for Form W-8BEN-E When any foreign connection is in the picture, get the correct withholding certificate before you pay and confirm the specific form with a tax professional.