Do LLCs Get a 1099? Rules by Tax Classification and Threshold

Whether LLCs get a 1099 depends on how the LLC is taxed and how much you paid it during the year. An LLC taxed as a sole proprietorship or partnership gets a Form 1099-NEC once your payments for services cross the reporting threshold. An LLC taxed as a C-corporation or S-corporation generally does not, though legal fees and medical payments are reported regardless of corporate status.

Which LLCs Get a 1099 and Which Don’t

The letters “LLC” on an invoice tell you nothing about 1099 obligations. An LLC is a state-law entity; the IRS taxes it under whichever classification the owners elected. That election is what decides the answer.

Single-member LLCs that made no corporate election are disregarded entities. Income flows to the owner’s personal return, and you issue a 1099-NEC when the threshold is met.¹
Multi-member LLCs default to partnership taxation. These also get a 1099-NEC.¹
LLCs that elected C-corp or S-corp taxation by filing Form 8832 or Form 2553 are treated as corporations. You generally do not send a 1099-NEC for service payments to them.²

One structure catches people off guard: a single-member LLC owned by a corporation. The disregarded LLC rolls up into its corporate parent, and the corporate exemption applies. If the W-9 shows a corporate name and TIN, treat the payment as a payment to that corporation.

The obligation only applies when the payment is made in the course of your trade or business. Hiring a contractor LLC to renovate your personal home doesn’t trigger a 1099 no matter how big the invoice.³

Use Form W-9 to Find Out How the LLC Is Taxed

You can’t guess a vendor’s tax classification from its name. Get a completed Form W-9 before you send the first payment.⁴ On the W-9, an LLC checks the “Limited Liability Company” box and writes a single letter next to it: C for C-corporation, S for S-corporation, or P for partnership. A single-member LLC that hasn’t elected corporate taxation instead checks the “Individual/sole proprietor or single-member LLC” box.

That single letter is the answer. C or S means the corporate exemption applies (with the exceptions below). P or a sole-proprietor check means you file if payments meet the threshold.

When You File a 1099 for a Corporate LLC Anyway

The corporate exemption has two well-known holes, and this is where most reporting errors happen.

Legal services. Attorney fees paid for the lawyer’s own services go in box 1 of Form 1099-NEC, even when the law firm is organized as an S-corp or C-corp LLC. Gross proceeds paid to an attorney, such as settlement funds passing through a trust account, are reported instead on Form 1099-MISC, box 10.²

Medical and healthcare payments. Payments to physicians, hospitals, clinics, and other healthcare providers go on Form 1099-MISC, box 6, regardless of the entity’s tax classification.⁵

The $2,000 Threshold for 2026 Payments

For years the reporting floor sat at $600. The One, Big, Beautiful Bill Act raised it to $2,000 for payments made after December 31, 2025, with inflation adjustments starting in 2027.⁶⁷

You calculate the $2,000 by totaling every payment to the same vendor across the calendar year for services, including parts and materials bundled into the service work.²

Payments for pure merchandise, telephone service, freight, and storage don’t count toward the threshold. If you bought $5,000 of inventory from an LLC and never hired the company for services, no 1099-NEC is required.

Payments by Credit Card or Payment App Are Excluded

If you paid the LLC by credit card, debit card, or a third-party payment platform like PayPal or Venmo for Business, you don’t issue a 1099-NEC for that portion. The payment processor handles reporting on Form 1099-K.² The 1099-K threshold is permanently set at more than $20,000 in gross payments and more than 200 transactions.⁸ Whether the processor actually files is the processor’s obligation, not yours.

Track your payment methods carefully. If you paid the same LLC $3,000 by check and $4,000 by credit card, only the $3,000 check payment counts against the 1099-NEC threshold, and only that portion appears on the form.

When a Vendor Won’t Return a W-9

Some vendors ignore W-9 requests. That doesn’t relieve you of anything. Without a valid taxpayer identification number, you’re required to begin backup withholding at 24% on payments and remit those amounts to the IRS using Form 945.⁹¹⁰ Mentioning the 24% withholding usually loosens the W-9 loose within days. If it doesn’t, withhold, and file the 1099-NEC using whatever information you have. Filing with an incomplete TIN field beats not filing.

Deadline and How to File

Form 1099-NEC is due to the recipient and to the IRS by January 31 of the year after payment. There is no automatic extension.²

If you file 10 or more information returns of any type during the year (all 1099s, W-2s, and similar forms combined), you must file electronically.¹¹ The IRS’s free electronic portal is the Information Returns Intake System (IRIS), which accepts manual entry or CSV uploads.¹² Paper filers under the 10-return threshold submit each batch with Form 1096 as a cover sheet.¹³

Penalties for Skipping a 1099 You Owed

The IRS charges per form, and the amount depends on how late you file. For returns due in 2026:¹⁴

Filed within 30 days of the deadline: $60 per form
Filed after 30 days but by August 1: $130 per form
Filed after August 1 or not filed: $340 per form
Intentional disregard: $680 per form, with no maximum cap

Small businesses (average annual gross receipts of $5 million or less over the prior three years) face lower annual maximums, but the per-form figures are the same. The intentional disregard penalty has no ceiling, so a business that knowingly skips 100 forms is exposed to $68,000 before interest.

1
Internal Revenue Service. Single Member Limited Liability Companies
2
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025)
3
Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
4
Internal Revenue Service. Form W-9 (Rev. March 2024)
5
Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
6
Internal Revenue Service. IRS Notice 2025-62
7
Office of the Law Revision Counsel. 26 U.S.C. 6041 – Information at Source
8
Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
9
Internal Revenue Service. Backup Withholding
10
Internal Revenue Service. Instructions for Form 945 (2025)
11
Internal Revenue Service. E-File Information Returns
12
Internal Revenue Service. E-File Information Returns With IRIS
13
Internal Revenue Service. About Form 1096, Annual Summary and Transmittal of U.S. Information Returns
14
Internal Revenue Service. Information Return Penalties