Yes. If your business paid a multi-member LLC $600 or more for services during the year and that LLC is taxed as a partnership, you need to send it a Form 1099-NEC. The IRS treats partnerships the same as individuals and sole proprietors for information reporting, so the corporate exemption that lets payers skip the form does not apply. What matters is not that the vendor is organized as an LLC — it’s how that LLC is classified for federal tax purposes.
Why a Partnership-Taxed LLC Doesn’t Get the Corporate Exemption
Form 1099-NEC reports nonemployee compensation: payments your business makes to outside workers, contractors, and service providers who aren’t on your payroll. The reporting threshold is $600 in total payments to a single payee during the calendar year.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
The main carve-out from this rule is for corporations. If a payee is a C corporation or S corporation for federal tax purposes, you generally skip the 1099-NEC, and that carve-out extends to LLCs that have elected corporate treatment.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC A multi-member LLC that has not made that election defaults to partnership classification.2Internal Revenue Service. Limited Liability Company (LLC) A partnership is not a corporation, so the exemption doesn’t reach it. You file the 1099-NEC.
The partnership files its own return on Form 1065 and issues Schedule K-1s to its partners, but that internal reporting does not relieve you of your obligation. The 1099 is how the IRS cross-checks what the partnership reports as income against what payers report sending it. Use the LLC’s Employer Identification Number from its W-9 when preparing the form.
Confirming the LLC Is Actually Taxed as a Partnership
You cannot tell an LLC’s tax classification from its name, its state registration, or how it describes itself. Collect a completed Form W-9 before you make the first payment.3Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification Make this a standing part of vendor onboarding.
Line 3a of the W-9 asks the payee to check a box for federal tax classification. An LLC taxed as a partnership checks the “LLC” box and enters “P” in the classification field. An LLC taxed as a C corporation enters “C,” and one taxed as an S corporation enters “S.”4Internal Revenue Service. Form W-9 (Rev. March 2024) If the box shows “P,” you’re issuing a 1099-NEC once the $600 threshold hits.
The IRS also offers a free TIN Matching service through its e-Services portal that lets you verify a payee’s name and Taxpayer Identification Number before you file.5Internal Revenue Service. Federal Agency TIN Matching Program Catching a mismatch early avoids penalty notices later.
What If the LLC Has a Different Tax Classification
Not every LLC you pay will be a partnership. The W-9 answer determines your obligation:
Single-Member LLC
A single-member LLC without a corporate election is a disregarded entity, and the IRS taxes the owner directly as a sole proprietor.2Internal Revenue Service. Limited Liability Company (LLC) A 1099-NEC is required once service payments reach $600. On the W-9, a disregarded entity doesn’t check the LLC box — it checks the box matching its owner’s classification, typically “Individual/sole proprietor.”4Internal Revenue Service. Form W-9 (Rev. March 2024) The TIN may be the owner’s Social Security Number or an EIN.
LLC Taxed as a Corporation
An LLC can elect corporate treatment by filing Form 8832 (C corporation) or Form 2553 (S corporation).6Internal Revenue Service. About Form 8832, Entity Classification Election Once that election is in place, you generally don’t send a 1099-NEC, with two exceptions covered below.
Two Payment Types That Require a 1099 Regardless
Even for a corporation — including an LLC taxed as one — two categories of payments must be reported:
- Attorneys’ fees. Payments to any entity for legal services go in box 1 of Form 1099-NEC. Gross proceeds paid to an attorney go in box 10 of Form 1099-MISC.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
- Medical and health care payments. These go in box 6 of Form 1099-MISC and must be filed even when the provider is incorporated.7Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
One further boundary: the 1099-NEC covers payments for services, not products. Buying $5,000 of office supplies from a vendor doesn’t trigger a 1099-NEC; paying the same vendor $5,000 to install them does. The instructions explicitly exclude payments for merchandise, telephone, freight, storage, and similar items.7Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
Deadline and the 10-Return E-File Threshold
Form 1099-NEC is due to both the IRS and the recipient by January 31 of the year following payment, with no automatic extension.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC If the date falls on a weekend, the deadline moves to the next business day.
If you file 10 or more information returns of any type during the year, you must file electronically. The count combines form types, so four Forms 1098 plus six Forms 1099-NEC puts you at 10 and triggers mandatory e-filing.8Internal Revenue Service. General Instructions for Certain Information Returns The IRS’s free IRIS Taxpayer Portal handles up to 100 returns at a time, but you need a five-digit Transmitter Control Code, and the application can take up to 45 business days — so set it up well before January.9Internal Revenue Service. E-file Information Returns With IRIS
What Skipping the Form Costs
The IRS imposes per-form penalties for 1099s that are late, wrong, or missing. For returns due in 2026:10Internal Revenue Service. Information Return Penalties
- Filed within 30 days of the deadline: $60 per return
- Filed after 30 days but by August 1: $130 per return
- Filed after August 1 or not filed at all: $340 per return
- Intentional disregard: $680 per return with no maximum cap
When the Vendor Won’t Give You a W-9
If an LLC partnership refuses to hand over a completed W-9, you cannot simply skip the 1099. Federal law requires you to begin backup withholding at 24% on all reportable payments to that payee.11Office of the Law Revision Counsel. 26 USC 3406 – Backup Withholding You deduct the 24% from each payment and remit it to the IRS using Form 945.12Internal Revenue Service. About Form 945 Backup withholding also applies when the IRS notifies you that a vendor’s TIN doesn’t match its records. Most vendors complete the W-9 once they understand the alternative, and the completed W-9 is also your documentation if the IRS later questions your filing decisions.