Do LLCs Get a 1099? Requirements, Exceptions, and W-9 Rules

Whether LLCs get a 1099 depends on how the LLC is taxed, not on the fact that it’s an LLC. If the LLC is taxed as a sole proprietorship (a single-member disregarded entity) or as a partnership, you send it a Form 1099-NEC when you paid $600 or more for services during the year. If the LLC has elected to be taxed as a C-corporation or S-corporation, you generally don’t — with two important exceptions for legal fees and medical payments.

Why the LLC’s Tax Classification Is What Matters

An LLC is a state-law entity, but the IRS classifies it federally based on ownership and any elections filed. There are four possibilities:

Disregarded entity: a single-member LLC by default, treated as a sole proprietorship.
Partnership: a multi-member LLC by default.
C-corporation: elected by filing Form 8832.
S-corporation: elected by filing Form 2553 after electing corporate status.

The defaults apply automatically; no filing is needed to be a disregarded entity or partnership.¹ The name on the invoice tells you nothing. “Smith Consulting LLC” might be a disregarded entity that needs a 1099, or an S-corp that doesn’t. The tax election controls.

When You Must Send a 1099-NEC to an LLC

Under 26 U.S.C. § 6041A, payments of $600 or more during a calendar year for services performed by a non-employee are reported on Form 1099-NEC.² For an LLC vendor, you owe a 1099-NEC when both of these are true:

The LLC is taxed as a disregarded entity or a partnership.
You paid it $600 or more during the calendar year for services.

The $600 is a total, not a per-invoice figure. Four monthly payments of $200 to the same LLC contractor cross the threshold at $800.³ Payments under $600 don’t require a 1099, though some businesses file them anyway for their own records.

When a bill covers both labor and parts, you report the full amount if the materials were incidental to the service. Pay a contractor LLC $3,000 for a repair job — $2,000 labor, $1,000 parts — and the whole $3,000 goes on the 1099-NEC.³

When You Don’t Send a 1099 to an LLC

The LLC Is Taxed as a Corporation

An LLC that has elected C-corp or S-corp treatment is generally exempt from 1099-NEC reporting for service payments, regardless of its legal name or state of formation.³ Two exceptions to this exemption follow below.

You Paid by Card or Third-Party Network

Payments made by credit card, debit card, or a third-party payment network (PayPal, Venmo for business, Stripe) don’t go on a 1099-NEC. The payment processor reports them on Form 1099-K instead.³ The current 1099-K threshold is $20,000 and more than 200 transactions per year.⁴ If you paid the same LLC partly by check and partly by card, only the check portion counts toward your $600 threshold.

You Bought Goods, Not Services

Payments strictly for merchandise, freight, or storage don’t trigger a 1099-NEC. Buy $5,000 of office supplies from an LLC and no 1099-NEC is required.³

You Paid Rent to a Property Manager

Rent paid to a real estate agent or property manager LLC belongs on Form 1099-MISC, not 1099-NEC. The property manager then reports rent forwarded to the owner on its own 1099-MISC.³

Two Times a Corporate LLC Still Gets a 1099

The corporate exemption has two significant holes that trip up business owners every year.

Legal Fees

Attorney fees of $600 or more paid to any entity — including a law firm LLC taxed as a corporation — must be reported on Form 1099-NEC, Box 1. The term “attorney” covers law firms and any provider of legal services, and the corporate exemption simply does not apply.⁵ Paid a law firm LLC $10,000 for contract review? You owe a 1099-NEC whether that firm is a partnership or an S-corp.

Medical and Healthcare Payments

Payments of $600 or more for medical or healthcare services must be reported on Form 1099-MISC, Box 6, even when the provider is a corporation or a corporate LLC. This covers payments by health, accident, and sickness insurance programs. When the provider is a corporation, list the corporation as the recipient rather than the individual practitioner.⁵ Payments to pharmacies for prescription drugs are excluded.⁶

Get a W-9 Before You Pay

You can’t answer the 1099 question without knowing the LLC’s tax classification, and Form W-9 is how you find out.⁷ Request a completed W-9 from every LLC vendor before the first payment goes out, not in January when the vendor has moved on.

The W-9 gives you two things you need. First, a checkbox showing federal tax classification: individual/sole proprietor, C-corporation, S-corporation, partnership, or trust/estate. That checkbox answers the 1099 question. Second, the Taxpayer Identification Number — an EIN for most LLCs, or the owner’s SSN for a disregarded single-member LLC.⁸ Keep the W-9 on file as your documentation for the choice you made. The IRS also offers a TIN Matching service to verify a vendor’s name-and-TIN combination before you file, which heads off mismatch notices.⁹

If the LLC Won’t Provide a TIN

Refuse to give you a valid TIN, or give you one the IRS later flags as wrong, and you’re required to withhold 24% of every payment and send it to the IRS. This is backup withholding, and it continues until the vendor supplies a valid TIN.¹⁰ Skip the withholding when it’s required and you can become personally liable for the uncollected amount.¹¹

Filing Basics

Once you’ve confirmed classification and crossed the $600 threshold, you prepare Form 1099-NEC. Copy A goes to the IRS, Copy B goes to the LLC, and you keep Copy C. The deadline to furnish Copy B to the LLC and file Copy A with the IRS is January 31 following the payment year. Payments made during 2025 must be reported by January 31, 2026.

If you file 10 or more information returns of any type in a year, you must file electronically.¹² That count combines 1099-NEC, 1099-MISC, W-2, and every other information return, so most businesses cross it quickly. Under 10 returns, paper is still allowed, but paper filers must use the official red-ink scannable Copy A — a printout from your computer won’t be accepted.

What It Costs to Skip a 1099

The IRS charges a separate penalty for each 1099 you fail to file correctly and each payee statement you fail to furnish on time. For returns due in 2026, per-return penalties are:¹³

Up to 30 days late: $60 per return.
31 days late through August 1: $130 per return.
After August 1 or never filed: $340 per return.
Intentional disregard: $680 per return, no annual cap.

The penalties apply separately to the IRS copy and the payee copy, so a single missed 1099 can produce two penalties. Small businesses (average annual gross receipts of $5 million or less over the prior three years) get lower annual caps. Filing a corrected return quickly keeps the penalty in the lowest tier, and showing reasonable cause, not just forgetfulness, can get penalties waived entirely.

1
Internal Revenue Service. LLC Filing as a Corporation or Partnership
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Office of the Law Revision Counsel. 26 USC 6041A – Returns Regarding Payments of Remuneration for Services and Direct Sales
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. Information Returns (Forms 1099)
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Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification
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Internal Revenue Service. Form W-9 Request for Taxpayer Identification Number and Certification
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Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
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Internal Revenue Service. Topic No. 307, Backup Withholding
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Internal Revenue Service. Instructions for the Requester of Form W-9
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Internal Revenue Service. E-File Information Returns
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Internal Revenue Service. Information Return Penalties